Report of International Institute of Water Management states that in order to keep the present situation until2025 year, Iran must increase about 112% of acquirable water resource, which, with reference to available equipment, seems impossible. Consequently, due to water shortage in Iran and inefficient use of available resources especially in agriculture sector, it has creates a lot of problems for Iranian water authorities, therefore, making a proper economical policy for use of these resources is necessary. Just as we know, prices mechanism is applied to balance the production and consumption of economical goods and services, and it seems that water is an economical commodity; hence its optimal allocation must be based to economical theories and prices mechanism.The efficiency of water pricing is also an important concern in most developed countries. In Iran, even ifwater services are often delegated to private operators, local communities still remain legally responsible for water supply. In this context, one of the most important tasks of regulatory authorities is to determine pricing scheme for the services provided by utilities.The main objective of this paper is to investigate the efficiency of current prices and price elasticity of waterdemand for tomato in Iran respectively.
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