Applied Economics Teaching Resources

an AAEA Journal

Agricultural and Applied Economics Association

Teaching and Educational Methods

Teaching Water Resource Economics for Policy Analysis

Bonnie Colby(a)
(a)University of Arizona

JEL Codes: JEL Codes: Q15, Q25
Keywords: Cost-benefit analysis, externalities, neurobehavior, public goods, risk, water resources

Publish Date: August 11, 2023

View Full Article (PDF)


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.

About the Author: Bonnie Colby is a Professor with the Department of Agricultural and Resource Economics at the University of Arizona. Email:

Copyright is governed under Creative Commons CC BY-NC-SA


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