Increased pressure on water resources has stimulated the search for mechanisms to induce efficient water use. Getting prices right is an important necessary step toward implementing such mechanisms. This article applies linear programming to estimate the translog logarithm input-distance function, estimate the willingness to pay for water, own and cross-price input elasticities, and detect technical inefficiencies of producers. In so doing, we use data on total production value, irrigated land, labor, capital, water use, and 'other inputs' obtained from 41 producers of public irrigation projects in Sub medium São Francisco River, Brazil. Results indicate that public policies can induce water conservation by credibly charging for water use and providing technical assistance to increase producers' technical efficiency.
willingness to pay for water; price-elasticities; technical efficiency; input-distance function; linear programming
