© 2014 by by Highland Economics. 

Leveraging Economic Insights since 2013

Water Rights Valuation

Highland economists have been valuing water rights for almost two decades, but with increasing water scarcity and a changing regulatory landscape, our water rights valuation services are more in demand than ever.  Highland has extensive experience valuing water rights using a variety of methods from previous transaction water transfer values to land price differentials on land with and without water rights.  Our analyses often included interviews with water rights holders and irrigation district managers and a wider review of values to ground truth specific estimated values.  Highland has completed water rights valuations in California and around the United States.

Selected Water Rights Valuation Projects

 

Valuing a Water Right for the Seller

A municipality in the Pacific Northwest hired Highland Economics to estimate the value of their water right. To provide the broadest context for the valuation, we examined the factors affecting the value of the water right to both the seller and the buyer. The valuation included research into the costs of alternative water supplies, the probability and potential costs of water shortages, the ability of the buyer to pay based on current water rates and revenues, and the recent sale prices of comparable water rights. The final report provided the client with a reasonable range of values for the water right, which could be used as a starting point to further price negotiations.

 

Water Right Valuation for a Prospective Buyer

A city in the Pacfic Northwest hired Highland Economics to estimate the value of a water right they were interested in purchasing. The study required an examination of the factors that affect the supply and demand of water in the area, which included a thorough assessment of the legal environment surrounding water. We generated a reasonable range of values of the water right by researching the costs of alternative water supplies, estimating the costs of potential water shortages, and analyzing the prices paid for other comparable water rights. Our analysis supplied the client with a better understanding of the water right’s value, which aided in price negotiations.

Water Right Valuation for the Bureau of Indian Affairs

The Bureau of Indian Affairs hired Highland Economics to estimate the value of water in the Tule River in Tulare County California. Highland Economics relied upon four estimation techniques to provide a range of plausible values for the client: comparable water sale values, land price differential, conservation, and income capitalization.  Highland provided the client with statewide and geographically relevant lease and permanent values for context to the final range of estimates for the value of water in the Tule River.