ABSTRACT
Water rights can be traded through sale or lease. 56 If water rights are tradable, the opportunity cost of water, i.e. the value of water in competing uses, is taken into account in decisions by water users. For example, a farmer holding substantial water rights within reach of a growing urban center has no incentive to save water if his or her water rights are not transferable. If he or she can sell or lease some of his or her water rights at an attractive price, there will be a greater incentive to save water.
