Transferring Water in the American West: 1987-2005

Rising urban and environmental demand for water has created growing pressure to re-allocate water from traditional agricultural uses. Water markets are powerful institutions for facilitating this re-allocation, yet the evolution of water markets has been more complicated than those for other resources. In this paper, we set the context for water marketing with an overview of western water law that highlights unique aspects of water law that affect how or whether a water market can develop. Second, we present new, comprehensive data on the extent, nature, and timing of water transfers across 12 western states from 1987-2005. We describe the methodology and decision rules used to collect water transfer information. Third, we identify water market trends and movements to provide a greater understanding of the institutional structure and the mechanisms by which water is transferred in the American West.