UMass Professor Helps Design Computer-Coordinated Water Allocation Markets in California

AMHERST, Mass. - James J. Murphy, an assistant professor at the University of Massachusetts, is helping design and test water markets in California and says he is in the first stages of developing software that can be used any place where water is scarce. Murphy also says when computers are used to coordinate such water allocation systems - matching the available supply with demand and charting how water is moved - environmental and wildlife factors can play key roles in decisions about when and where the water is used.

Murphy says computers are ideally suited to this task because even an ordinary desktop model can keep track of many factors that affect both the supply of water that is available and the demands for its use. This is especially true in a state such as California where large amounts of water are moved throughout the state for both agriculture and human consumption, Murphy says. The computer-coordinated water markets he is designing work best during times of low supply, he says.

Computers also can be programmed to take into account the complex physical infrastructure of an entire state, Murphy says. In California, this means not only the rivers and reservoirs that supply water are monitored, but also the mazes of canals and irrigation ditches found throughout the state.

Murphy spent the last two years as a pre-doctoral fellow at the Economic Science Laboratory at the University of Arizona managing a research program to design and test water markets. That study was funded by a five-year, $1-million grant from the National Science Foundation (NSF) and the U.S. Environmental Protection Agency. Murphy and his colleagues at the laboratory were also recently awarded a three-year, $300,000 grant from the NSF to apply computer-coordinated market technology to air pollution permits.

Murphy joined the faculty of the UMass department of resource economics this fall and holds a joint appointment with the Center for Public Policy and Administration. Murphy earned his doctorate in 1999, and in 1996 he earned a master''s degree, in agricultural and resource economics from the University of California, Davis. He earned a bachelor''s degree at Villanova University in 1987.

Currently, Murphy is conducting research projects on water market design, the role of government in determining how shared resources such as ground water or forests are used, and pollution permit markets designed to provide incentives to improve pollution control technology. In the spring, Murphy will teach undergraduate courses in experimental economics, which encompasses the testing of economic theories and design of new markets. He will also teach public finance for graduate students.