Spatial heterogeneity of the economic value of water in strawberry crops in Mexico

Abstract

This study estimates theoretical water requirements and the shadow price of water for the production of strawberry in Mexico at national, state, and municipal scales, evaluating spatial variation to identify whether water profitability is conditioned by water demand or cost structures. The shadow price, expressed as the Economic Value of Water (EVW), captures the marginal productivity of the water resource; however, it does not represent the full economic value of water, which would also require accounting for environmental externalities, opportunity costs, and basin-level water availability indicators. The Residual Value Method (RVM) was applied integrating production data and standardized cost structures; water requirements were modeled with CROPWAT 8.0, and a variance decomposition was applied under 20 combined scenarios per municipality. Results show that, at the national scale, costs explain 63.4% of EVW variation; however, marked spatial heterogeneity exists. In arid regions such as Ensenada, water requirements determine more than 57% of the variation, while costs predominate in central Mexico. Limitations include the use of standardized state costs and theoretical water requirements due to the lack of direct volumetric measurements at the plot level. The work provides original evidence that export-oriented protected agriculture does not homogenize the value of water, revealing contrasting territorial patterns. It is concluded that the economic productivity of water in strawberry farming is not uniform, it is conditioned by specific territorial configurations where physical scarcity acts as a determining economic constraint only in certain arid clusters.