Water Utilization and Reallocation in Chile: A Study of the Pirque Valley.

The 1967 Water Code requires equalization of water rights per hectare in each "homogeneous farming area." Analysis of a typical area using linear programming models of representative farms indicates that equalization of water allocations per unit of land would result in regressive income redistribution, whereas the optimum economic reallocation would result in progressive income redistribution. Aggregate income gains in either case would not exceed 5%. Given the extreme inflexibility of the existing water distribution system, the transactions costs of changing water allocations would probably exceed benefits. [ABSTRACT FROM AUTHOR]