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We develop an Israeli version of the Multi-Year Water Allocation System (MYWAS) mathematical programming model to conduct statewide, long-term analyses of three topics associated with agricultural reuse of wastewater. We find that: (1) enabling agricultural irrigation with treated wastewater significantly reduces the optimal capacity levels of seawater and brackish-water desalination over the simulated 3-decade period, and increases Israel's welfare by 3.3 billion USD in terms of present values; (2) a policy requiring desalination of treated wastewater pre-agricultural reuse, as a method to prevent long-run damage to the soil and groundwater, reduces welfare by 2.7 billion USD; hence, such a policy is warranted only if the avoided damages exceed this welfare loss; (3) desalination of treated wastewater in order to increase freshwater availability for agricultural irrigation is not optimal, since the costs overwhelm the generated agricultural benefits. We also find the results associated with these three topics to be sensitive to the natural recharge of Israel's freshwater aquifers, and to the rate at which domestic-water demand evolves due to population and income growth.

Perennial crops require substantial initial investment in groundwork and planting, as well as a multiyear gestation period without commercial yield. Therefore, a crop's cycle (from planting to felling) should be long enough in order to cover the fixed cost and become profitable. The problem becomes involved when the cycle's duration is stochastic due to occurrence of uncertain event that terminates the cycle prematurely. Studying orchard management under stochastic drought events, we show that to each perennial crop that is profitable without drought hazard, there exists a critical drought hazard above which the crop turns loss making. We refer to this critical drought hazard as the crop's drought vulnerability index and show that it increases with the length of the gestation period, the ratio of fixed cost to average annual profit and the interest rate, and decreases with the natural (uninterrupted) cycle length. We then investigate the economic value of a stable water source, such as recycled water, that stabilizes the water supply and diminishes the drought hazard. An empirical application in northern Israel reveals that the stabilization value of recycled water due to its role in eliminating the drought hazard far exceeds its supply cost.

This paper develops a regional-level planning model aimed at allocating treated sewage sludge among potential users. The model incorporates, in one endogenous system, the economic, biological and environmental relationships and its objective is to maximize the regional social welfare. A few allocation approaches from the concept of transferable utility games are applied to determine a reasonable and fair allocation of the additional net benefits resulting from regional co-operation which is acceptable to all relevant economic units (players). The analysis is applied to a region in Israel and the results support regional collaboration among the relevant players which increase economic benefits by 19% and enable avoidance of sea pollution.

The article explains the phenomenon of counter-urbanization, which has become prominent in most developed countries. We develop a model that provides an economic rationalization for the observed willingness of incumbent farmers of a rural region to absorb nonfarmer urban migrants. The analytical findings show that counter-urbanization increases the region's welfare-maximizing population, decreases the optimal number of incumbent farmers, and increases the per capita welfare. The empirical results, which are based on data from rural Israel, demonstrate that while the optimal population of farmers decreases slightly, the total optimal population of the region more than triples and farmers' per capita welfare almost doubles. Copyright 2011, Oxford University Press.

Using a survey that was conducted among students and based on the principles of the “dictator game”, it was found that the ability of the government to modify the distribution of income in the economy for the benefit of young-persons ages 20–30, or only for the neediest among them, is limited. This is especially true when the number of children in the family is large and when the parents’ age is younger. We found that the average altruism level of young-persons ages 20-30toward their parents is high (0.8). Key factors that significantly affect the level of altruism are the gender of the child, whether there is a single child, and whether or not the children live with their parents. Additionally, the empirical analysis identifies families with parents that have various motivations to support their mature children.

Recent studies dealing with the potential of Renewable Energy Sources (RES) for desalination along the Mediterranean Coast and in the Middle East choose to use RES to generate electricity first, and then use this electricity to power desalination. The present work eliminates the phase of electricity generation by using solar thermal energy directly for distillation by evaporation. Saving the thermal to mechanical conversion losses allows the proposed Multi Effect Distillation (MED) process to compete economically with Reverse Osmosis (RO) process of significantly lower energy consumption. The new opportunity to revive direct thermal evaporation, arises from a new collector technology developed by Solel Solar Systems, that is coupled to the familiar MED process modified by IDE Technologies to match the solar steam characteristics. Solel has applied its unique technique of selective coating to demonstrate a very efficient solar radiation collection, achieving high temperatures with relatively low installation costs. While the generated steam is not sufficient for efficient generation of electrical power to be used for RO — its quality far exceeds the minimum necessary for the existing methods of steam powered desalination by evaporation. Our analysis shows that a combination of a large number of effects of evaporation, together with high pressure saturated steam available for recycling, yields a dramatic improvement in the production rate of water desalination, accompanied by relatively modest increase in the desalination installation cost. For the specific case analyzed in detail, replacing the commonly used low temperature MED with the new combination, increases the Economic Ratio (ER) from 7 to 16 — a factor of 2.3, while the installation costs grew by only 60%. This implies that the distillate production costs are significantly lower with the new proposed combination. The cost increase is mainly due to the higher costs for the expansion of the desalination system, with relatively low additional costs for producing the high temperature solar steam. A basic assumption, drawn from economic considerations and technological constraints, is that the desalination system would operate continuously, while the solar system, which is limited to daytime operation, would feed a steam generator combined with a storage tank. Therefore utilization of solar energy requires either large and expensive heat storage capacity or fossil fuel backup — a hybrid plant. The effects of storage and fuel cost are presented. The paper refers to three levels of desalination capacity: 1) A small 1000m3/d plant, typical for plants serving small settlements or industries at rural locations, isolated from fresh water and grid power sources. Applying the present model distillate cost for such a solar powered plant along the Red Sea coast is about $1.2/m3 for solar-only plant with large capacity steam storage, and $1.1/m3 for hybrid plant using $0.18/kg diesel oil when solar-steam is not available. Where brackish water are available for mixing, these costs decline approximately by 30%; 2) The medium size 10,000m3/d plant is of the scale actually required for the town of Eilat. Here the Solar-MED plant would produce distillate at $0.92/m3 and by blending with brackish water available on site, the cost would decline to $0.74/m3; 3) On the other extreme we evaluated a large 100,000m3/d plant, on the scale of a national water supply plant. Here the distillate cost is about $0.69/m3 for hybrid plant (including land cost) at an available site close to the southern end of Israel's Mediterranean shore. These preliminary results suggest a competitive distillate cost as compared to grid-powered RO, when electricity cost is about ¢6.5/kWh. To conclude: Solar-powered desalination is conceivable in Israel at a reasonable cost, and has even broader economic potential along the Red Sea and similar sites.

Many observers of Israel's defense resource allocation process believe that insufficient resources are devoted to troop quality, while excessive resources are devoted to weapon quality. In this paper, we offer a potential explanation for this phenomenon. In our example, officers seek to signal their ability through their budgeting choices. Signaling behavior, combined with the timing and informational structure of defense decision‐making, results in a sub‐optimal allocation of resources to training and troop quality.

The efficiency of agricultural inputs may be reduced by ignoring the inherent variability in soil texture and the non-uniformity of the input's application. This paper focuses on variable-rate irrigation, which is performed via subdivision of the spatially variable field area into a controlled number of individually irrigated management units (MUs). The impact on profits and input decision of the MUs' size, the (technology-dependent) degree of irrigation uniformity, and the (cultivation-dependent) soil properties is investigated. A framework to evaluate the loss from imperfect information about the spatially random soil properties is developed and applied to sweet corn production. The analysis suggests that utilisation of site-specific farming and adoption of improved irrigation and/or cultivation technologies do not guarantee water saving. Copyright 2000 by Oxford University Press.

Water scarcity is a “fact of life” in Israel, where demand for water routinely exceeds its supply. The commonly agreed-upon policy to bring demand and supply into balance failed mainly due to population increase. In addition, he years 2001–2005 saw the most severe drought to hit Israel in a century. In this chapter we discuss how different water issues were dealt over time by the Water Authority in Israel.

This study offers a high-resolution model of nationwide water supply. The model is sufficiently detailed to represent all main water sources in an economy, the principal segments of the conveyance system, urban, industrial and agricultural demand regions, and various water types, including fresh, saline and recycled. Calibrated for Israeli 2010 data, we find that the optimal extraction of fresh water is only 2% larger than the total observed supply from those sources. However, for some specific sources, the deviation between optimal and observed quantities is significant. Assuming average constant recharge, the optimal aggregated desalination is 57% of the 2010 desalination capacity and only 33% of the present desalination capacity. Even with an assumed 40% decline in recharge (for example, due to climate change), the model uses only 50% of the present desalination capacity. This may suggest that the construction of desalination facilities in Israel, which began in 2005, could have been delayed. The model establishes a comprehensive system of pumping levies and user fees that support the optimal allocation. However, due to considerable scale economies, the average cost is almost 50% larger than the marginal cost. The implications are that the welfare cost of the recent Israeli Balanced Budget Water Economy legislation is more than 100 million USD per year, about 10% of the water economy share of the GDP.

[1] Following suitable treatment, municipal wastewater can be used for agricultural irrigation; the potential benefit to the agricultural sector is especially significant in arid and semiarid regions, where fresh water is scarce. The analysis focuses on a region which consists of a principal (a wastewater “producer” (a city)), and two competitive agents (water users (two groups of farmers' associations)), who make decisions under conditions of asymmetric information. First, we develop an optimization model aimed at maximizing the principal's profits from conveying treated wastewater without damaging the farmers' reservation utilities or profits. The analysis determines the treated-wastewater allocation, income transfers, and profit allocation among the three assumed economic entities. Contracts composed of transfer payment–wastewater combinations are studied in a mechanism design setting in which the city has incomplete information on the farmers' demand for treated wastewater. The theoretical analysis is applied to the situation in the Sharon region of Israel. The empirical results show that regional cooperation is profitable for all of the involved economic entities.

This paper analyzes the operation of an agricultural multipurpose service cooperative in which family farms are the producer-consumer economic units. The cooperative is aimed at maximizing the utility of its member-patrons. The cooperative provides services and sets prices, taxes, and usage restrictions in conformity with the individual's decision making rules. The cooperative can establish a mode of operation that will induce the individual members to behave in a manner compatible with the requirements for Pareto optimality. The economic stability of the cooperative cannot be guaranteed.

The subject of technological innovations in agriculture has attracted considerable attention among development economists because new technologies offer opportunities to increase income substantially. Immediate and uniform adoption of agricultural innovations is quite rare. Some innovations have been well received while others have been adopted by only a very small group of farmers. The aim of this paper is to identify, estimate and explain the parameters which promote the adoption and speed the rate of diffusion of drip irrigation technology in cotton‐growing. Using cross‐section time‐series regression models, the analysis was applied to a sample of 38 kibbutz cotton‐growers in two regions of Israel. It was found that profitability is the major motive for adoption of drip irrigation in cotton by a profit‐maximizer kibbutz farm. Additional significant explanatory variables which affect the rate of diffusion are detailed in the paper.

Crop insurance provides a potential tool for reducing agricultural chemical use by providing a substitute for the risk management benefits of pesticides. This article describes the results obtained from an integrated modeling system developed to assess the efficacy of crop insurance used in this manner. While crop insurance is found to reduce pesticide application, the extent of its impact depends significantly upon the distribution of risk aversion in the target population and the reductions can be costly, ranging from $25 to $45 per pound of active ingredient.

Empirical estimates of benefits from groundwater management are reported for an area in California with heavy reliance on groundwater supplies. Benefits are quite sensitive to the water demand schedule and interest rate but less sensitive to other parameters. However, in all cases considered the increases in welfare from groundwater management are less than ten percent. Tax revenues received under a system of pump taxes are four to five times as large as the benefits from management. Thus, groundwater users gain under a system of quotas but may suffer substantial welfare losses under pump taxes.