Some Methodological Problems in the Economic Appraisal of Increments of Irrigation Water

The primary objective of this study was to establish a production function for alfalfa grown in the Sevier Valley using farm survey data. A secondary objective was to point out the analytical difficulties in establishing a production function for alfalfa. A multiple regression model using 12 linear, 12 nonlinear, and 7 interaction terms was employed. A coefficient of determination of .70 was obtained for the model. Intercorrelation problems associated with the model limit its usefulness for economic and predictive purposes. The predictive value of the model was greatly increased by reducing the numb er of correlated variables included in the model. The reduction in the number of variables also reduced the coefficient of determinations. Study results indicate that additional research on the correlation structure associated with multiple regression models is necessary. Study results indicate that optimum moisture days and actual consumptive use of moisture are better measures of water use than gross amounts of irrigation water applied. The use of these indicators reduces the number of problems associated with timing of water application and availability of water to plants. Their use would increase the reliability and significance of the evaluation of increments of irrigation water. The optimum use of irrigation water on alfalfa in the Sevier Valley is 40 inches per acre. At this use the net income to the farmer is $11.61 per acre