Markets, mis-direction and motives: A factual analysis of hoarding and speculation in southern Murray–Darling Basin water markets

There is a long history of concern about speculation in water markets, and potential adverse impacts on agricultural water users. However, applications of traditional analysis into price increase drivers in water markets are challenging due to data limitations. To address this, we use speculation theory, most notably Hirshleifer’s four fundamentals for speculative trade, to examine whether speculation or hoarding price increase drivers are evident in Australia’s largest water market, the southern Murray–Darling Basin. While speculation is likely, and with good reason given the gains possible, we find no evidence of hoarding behaviour in market price or volume trends. It is more plausible that agricultural sectors – notably horticultural users – have driven price increases given their requirements to access water at any cost during periods of low supply. These findings conform to theoretical expectations and help to inform badly needed insights into water market fundamentals required for future analysis. Overall, calls for stricter market controls on non-agricultural water users are not supported by our findings. However, greater transparency in water market and broker activity, arising from substantial improvements in the underlying data and trade regulations associated with water markets, would be an ideal outcome from any public police extension.

长期以来，人们一直担忧水市场中的投机行为及其对农业用水户可能产生的不利影响。然而，由于数据限制，传统分析方法在探究水市场价格上涨驱动因素方面的应用面临挑战。为解决这一问题，我们运用投机理论——其中最值得关注的是赫什莱弗（Hirshleifer）提出的投机交易四大基本面——来考察澳大利亚最大的水市场（南部墨累-达令盆地）中，投机或囤积是否为明显的价格上涨驱动因素。尽管投机行为可能存在（考虑到潜在收益，这一可能性也有充分依据），但我们并未在市场价格或交易量趋势中发现囤积行为的证据。更合理的解释是，农业部门（尤其是园艺用水户）推动了价格上涨，因为在供水短缺时期，他们需要不惜代价获取水资源。这些发现与理论预期相符，有助于为未来分析所需的水市场基本面提供迫切需要的洞见。总体而言，我们的研究结果并不支持对非农业用水户实施更严格市场管制的呼吁。然而，通过显著改进水市场相关的基础数据和交易法规，提高水市场及经纪活动的透明度，将是任何公共政策拓展的理想成果。