Applied Economics Teaching Resources

an AAEA Journal

Agricultural and Applied Economics Association

Volume 5, Issue 3, September 2023Download PDF

Special Issue: Contemporary Adjustments Needed for Teaching Water Economics In Light of Challenges Facing the Water Sector and its Users

Contemporary Adjustments Needed to Teaching Water Economics in Light of Changes Facing the Water Sector and Its Users: Introduction to the Special Issue

Ariel Dinar and Mehdi Nemati

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Posted online: August 16, 2023
DOI: 10.22004/ag.econ.338377

Abstract: Water resources management in many countries faces challenges that stem from a combination of impacts of climate change, population growth, and globalization. This introductory note argues that contemporary adjustments are needed to the curriculum of teaching water economics in light of these changes. The note reviews the contribution of each of the thirteen papers in the special issue to the question posed in the title of that special issue. The note concludes that while efforts and new ideas embedded in the papers reviewed, are effective, there is still room and need for additional aspects to be considered in the new water economics curriculum."

Keywords: Climate change, demand management, groundwater, graduate and undergraduate teaching, interdisciplinary teaching, water economics curriculum

Teaching Water Economics Using Dynamics and a Political Economy Framework

David Zilberman, Scott Kaplan, Alice Huang, Lanie Goldberg

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Posted online: August 16, 2023
DOI: 10.22004/ag.econ.338378

Abstract: We propose a framework for a water economics course that analyzes water allocation in a dynamic context. The proposed course has six elements: first, an introduction to basic facts and features of the evolution of water systems; second, the political economy of water systems and their evolution over time; third, benefit-costbenefit-cost analysis and developing water supply chains; fourth, the pricing, allocation, and management of water; fifth, the environmental implications of water use; and sixth, global water issues. We present suggestions for exercises of each topic."

Keywords: Allocation, benefit-cost analysis, environment, evolution, political economy, water

Reconciling Theory and Practice in Higher Education Water Economics Courses

Roy Brouwer

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Posted online: August 15, 2023
DOI: 10.22004/ag.econ.338379

Abstract: The water economics course offered at the University of Waterloo provides students from the Department of Economics and other schools and departments across campus the opportunity to learn more about the application of economic theory, concepts, models, and methods to global water challenges. Students are prepared for real-world challenges by linking theory to practical examples. They are brought “into the field” through visits to local wastewater treatment facilities and real-world practical assignments. Emerging trends and water policy challenges in need of reconciliation with economic theory and methods are addressed. The practical examples make abstract water management challenges in the water economics literature real for students. Collaboration with other disciplines and sectors, as increasingly required in the water domain, is emphasized to effectively inform economically efficient water management. The annual course evaluation shows that economics students value especially the applied and interdisciplinary nature of the course."

Keywords: Collaboration, education, interdisciplinarity, water challenges, water economics

Teaching Principles of Water Economics to Non-Economists: Lessons from California

Mehdi Nemati and Ariel Dinar

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Posted online: August 14, 2023
DOI: 10.22004/ag.econ.338380

Abstract: Economic analyses are essential in water management and allocation among sectors and regions that face water scarcity. State and local agencies in charge of water management in California play a major role in making appropriation decisions and designing policies on such issues. Economic decisions are even more critical with the predicted, more frequent water scarcity due to population increases and climate change impacting water resources. Since most of the staff members in these agencies are non-economists, they may lack the skills to develop accurate analyses and make economic decisions on water management. In addition, university graduates, to be placed in water agencies after graduation, often lack an economic background from the various courses offered on water issues. For those reasons, we present in this paper the building blocks and content of a water economics and management course targeted toward university upper-level non-economist students while providing details on the weekly course content and learning assignments. In addition, we evaluate course achievement results from a learning assessment survey, comparing the knowledge and understanding gained between the first and last week of the course."

Keywords: California, non-economist, policy, teaching, water economics, water literacy

Innovations for the Water Resource Economics Curriculum: Training the Next Generation

Frank A. Ward

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Posted online: August 12, 2023
DOI: 10.22004/ag.econ.338381

Abstract: Several climate-related challenges facing water managers require innovations in the water resource economics curriculum. Some of those challenges include the need to address population stress, food security, water security, energy security, environmental protection, peace, economic development, health, climate, and poverty. Despite the need for innovations in the water economics curriculum, little has been published to date describing useful curriculum innovations up to the task. This article addresses several curriculum innovations needing attention. It does so by addressing two questions: (1) What economic principles are needed as a foundation for curriculum reform in water economics to better understand today’s water problems? (2) What innovations or adjustments are needed to assure a solid education and training of the next generation of water economists? It addresses these two questions by describing the range of water-related issues facing water managers internationally as well as relevant economic foundations needed for student engagement. It follows by describing several innovations that can prepare water economics students to better understand and address emerging water science and policy challenges. Results of a simple linear programming model are presented."

Keywords: Agricultural and Applied Economics, diversity, equity, inclusion

Teaching Water Resource Economics for Policy Analysis

Bonnie Colby

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Posted online: August 11, 2023
DOI: 10.22004/ag.econ.338382

Abstract: Water resource economics (WRE) course design merits fresh attention, given global water crises and innovations in effective water management and governance. WRE courses need to provide tools for analyzing a new generation of water policy tools and to present a well-rounded perspective on the role of benefit-cost analyses (BCAs) in the policy process. Updated WRE courses can emphasize water’s role in energy, food and development economics, social justice and cross-cultural considerations, up-to-date understanding of neurobehavior in economic decision making, and the importance of nonmarket valuation and regional economic methods. Use of geospatial data in WRE econometric analyses deserves attention, as well as more sophisticated treatment of risks related to extreme events so that policy processes can consider these more fully. The article provides a number of other practical recommendations for designing upper-level undergraduate and graduate WRE courses, and includes a list of key topics and sources for class readings."

Keywords: Cost-benefit analysis, externalities, neurobehavior, public goods, risk, water resources

Teaching Water and Sanitation Economics and Policy with a Focus on Low- and Middle-Income Countries

Dale Whittington and Duncan Andrew Thomas

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Posted online: August 10, 2023
DOI: DOI: 10.22004/ag.econ.338383

Abstract: This paper describes our experience from 2010 to 2018 developing and delivering a multidisciplinary graduate course on “Water and Sanitation Policy and Planning in Developing Countries.” This course was synchronously taught at the University of North Carolina at Chapel Hill and the University of Manchester, UK. We describe both our learning objectives and the conceptual framework for policy analysis that were used to structure the course. We discuss our problem-based learning approach to case studies and policy memo format assignments. We summarize eleven key messages that we want students to think hard about when reflecting on the course materials. This aligns with our aim to prepare students to address key challenges of water and sanitation access and provision that they could encounter in careers in the global Water Sanitation and Hygiene (WASH) sector. We discuss how our teaching was improved from 2012 after we converted our in-person class for parallel delivery as two massive open online courses (MOOCs) on Coursera. This afforded more class time to use a “flipped” classroom format, enabling more active participation because students could watch recorded lectures outside class."

Keywords: Water, sanitation, Water Sanitation and Hygiene (WASH) sector, massive open online courses, MOOCs, low- and middle-income countries

Teaching Water Economics by Building Problem-Based Case Studies

David Zetland

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Posted online: August 9, 2023
DOI: 10.22004/ag.econ.338384

Abstract: Academic economists have many insights to contribute to water management at all scales. These contributions need to be placed in local institutional contexts and reconciled with insights from other disciplines if they are to affect policy, action, and evaluation. Case studies offer a useful way to organize different lines of thinking in the classroom or the field. This article reviews these factors—academic vs. practical perspectives; economic vs. other disciplines—and provides a framework for teaching water economics by building problem-based case studies."

Keywords: Case studies, problem-based learning, teaching, water, x-disciplinary

Teaching Water Economics in a Desert Environment

Slim Zekri

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Posted online: August 8, 2023
DOI: 10.22004/ag.econ.338385

Abstract: Teaching water economics in a desert environment is less complex than in other environments. Economic methods dealing with the interaction between surface and groundwater, surface water pollution, water for nature, and hydropower are not in need in desert environments. The course focuses on demand-side policies such as quantity restriction, rate setting, technology adoption, and comparisons of policies oriented toward reducing water demand and addressing the wasteful use of water. Often adopting water-saving technologies have the ability to reduce demand without decreasing users’ utility. We discuss the right of access to water and fairness. The course addresses the rationale for supply-side policies implemented in Gulf Cooperation Council (GCC) countries. We emphasize the environmental impacts and energy requirements of desalination as limits. Alternative sources of water for cities, such as the expansion of existing agricultural water markets to encompass trade between farmers and cities is explored. The course looks into the social impediments of treated wastewater recycling in farming. The course is taught since 2011 to undergraduate students in the form of lectures and lab work with the support of videos and flipped classroom. During the last weeks of the course, each student presents to the class a paper on the main issues addressed."

Keywords: Demand management, supply augmentation, water markets, desalination, water energy-nexus

Solving Optimal Groundwater Problems with Excel

Christopher A. Wada, Sittidaj Pongkijvorasin, James A. Roumasset, and Kimberly M. Burnett

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Posted online: August 7, 2023
DOI: 10.22004/ag.econ.338386

Abstract: Welfare maximizing management of coastal groundwater requires a sequence of pumping targets, typically terminating with a constant withdrawal rate in the long run. In contrast, managing according to sustainable yield at best identifies the constant rate of pumping in the long run. We illustrate an accessible solution method, using Excel Solver to find the optimal transition paths of groundwater pumping, price, and head level and the corresponding solutions in the long run. The developed framework is applied to the Pearl Harbor Aquifer (PHA) in Hawaii using data from previous studies. Each step of the solution process is described, including setting parameter values and defining objective, variable, and constraint cells in Excel to facilitate successful replication of the results. Possible extensions are also discussed such as watershed conservation, protection of groundwater dependent ecosystems, and management of multiple aquifers."

Keywords: Coastal aquifers, dynamic optimization, Excel Solver, groundwater management, sustainable yield

Simulating a Water Market: An In-Class Activity to Compare Market Efficiency under Various Institutions and Relative Advantages of Agents

Kyle D. Wilson

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Posted online: August 6, 2023
DOI: 10.22004/ag.econ.338387

Abstract: Water markets are a public policy tool that can help to allocate water to its highest value uses, creating more efficient outcomes. This paper presents a classroom simulation that exposes students to some of the practical ramifications of establishing a water market and the outcomes that result. The activity has students role-playing as various businesses that require water for operation and assigns initial water endowments to some of the agents. Students must buy and sell water on a market and attempt to maximize their individual welfare. The students gain a deeper understanding of the welfare gains from water markets and learn how a lack of information and negotiating power can create inefficiency."

Keywords: Active learning, classroom game, economics education, water economics, water markets

Water and Economics: Why We Need and Ought to Teach Water Economics in the Modern Economics Curriculum

Mohammad Mashiur Rahman, Samrat Kunwar, Niraj Khatiwada, Mengqi Liu, Alok Bohara, Jingjin Wang

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Posted online: August 4, 2023
DOI: 10.22004/ag.econ.338388

Abstract: Water scarcity and the availability of good quality water are major challenges facing many regions globally, and these topics warrant attention in economics; a discipline that studies the allocation of scarce resources. Integrating water resources into the economics curriculum is essential for students to understand water-related issues, water distribution, and the implications of current water management policies on the future. Although water economics is covered by some institutions in the United States and around the world, the coverage is mostly limited to basic economic theories and applications, with little attention paid to the broader issues pertaining to water. We provide an examination of the current state of water issues coverage in undergraduate and graduate courses across various institutions in the United States. A novelty of our investigation lies in analyzing how water topics are addressed at institutions located in different water-stressed regions. Additionally, we present several pedagogical approaches that are currently being applied to water economics teaching. This study also proposes innovative teaching interventions that incorporate water topics into the economics curriculum and, in doing so, enhance students’ understanding of basic economic theory, analysis, and real-world implications."

Keywords: Current water economics courses, teaching strategies, water economics teaching, water topics

Reimagining Teaching Water Issues through Integrative Experiential Learning

Samrat B. Kunwar, Niraj Khatiwada, Mohammad Mashiur Rahman, Mengqi Liu, Swati Thapa,

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Posted online: August 3, 2023
DOI: 10.22004/ag.econ.338389

Abstract: This paper highlights an undergraduate experiential learning course on water resources, which was designed and coordinated by the Nepal Study Center (NSC) and offered by the economics department at the University of New Mexico (UNM). The experiential learning course, “Problem-Based Learning,” combined learning experience in the classroom with community outreach and international research experience via a study abroad program. The course development closely followed the principles of the “experiential learning theory” (ELT), and the course structure comprised four components: (1) field-based data collection, problem identification, and conceptual framework development, (2) data analysis and development of potential intervention and solutions, (3) study abroad and implementation in the field, and (4) dissemination of findings and community outreach. A noteworthy feature of this learning model included graduate and undergraduate student collaboration. Graduate students aided instructors by serving as mentors for undergraduate students, helping them with empirical analysis and leading discussions in the development of policy tools and solutions implemented in the study abroad program. The broader impacts of these experiential learning courses can be summarized as: (1) student learning experience, (2) community impacts, (3) research experience, and (4) potential for the program to serve as a model for other institutions."

Keywords: Community outreach, experiential learning, interdisciplinary teaching, problem-based learning, water

Teaching Price Elasticity of Demand and Marginal Analysis using Household Water Pricing

Eric Edwards , Sara A. Sutherland, Anastasia W. Thayer

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Posted online: August 2, 2023
DOI: 10.22004/ag.econ.338390

Abstract: Understanding the economics of urban water pricing is fundamentally about the concepts of price elasticity of demand and marginal analysis. Recent advances in our understanding of consumer response to water pricing, emerging discussions of equity issues, and water utility interest in innovative pricing approaches make this topic important to integrate into any class on natural resources or water economics. To aid instructors, we highlight current issues in the field and emerging research, and present materials used to teach urban water pricing to both undergraduate and graduate audiences. We present a variety of activities and resources to integrate concepts of price elasticity of demand, conservation pricing, utility considerations, and equity issues. After using these materials, students are expected to know how to calculate prices and elasticities and explain these values in the broader context of conservation and equity"

Keywords: conservation pricing, graduate teaching, undergraduate teaching, urban water