An analysis of Watermove water markets

This paper conducts an analysis of the water markets in Victoria covered by Watermove. The analysis in this paper examines the weekly trading activity across trading zones. For the majority of trading zones there is little trading activity that occurs. There are three trading zones in which the markets for temporary water rights are reasonably active and liquid on a weekly basis, and for these zones an analysis is conducted of their demand and supply elasticities and consumer and producer surplus. The results of this analysis suggest a stronger relationship on the supply side between prices, volumes, elasticity and producer surplus.