Sağlam, Yiğit2011-02-182022-07-052011-02-182022-07-0520112011https://ir.wgtn.ac.nz/handle/123456789/18553I consider the problem of water usage, developing a model to analyze the optimal pricing of water within a second-best economy. Consumers are assumed to have two main needs for water|drinking and non-drinking. Water is also used to produce food: The agricultural sector has a derived demand for water. As a water supplier, the local government may price discriminate across consumers and farmers. I introduce the second-best pricing scheme, derive conditions for the marginal-cost pricing and inverse-elasticity rules to apply, and analyze when it is optimal for the government to optimally deviate from these two pricing schemes.pdfen-NZhttp://www.victoria.ac.nz/sef/watermodeloptimalpricingText