Groundwater Valuation in Texas: The Comparable Transactions Method

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Multiple methods can be used to value groundwater, with some more applicable in certain situations than others. This report analyzes the “comparable transactions” method and how it can be applied to groundwater valuation in Texas. In a nutshell, this entails examining transactions for groundwater purchases or sales to gather pricing information. If available, recent sales or leases of comparably situated water rights or water resources in place offer a useful valuation metric.

Part A outlines why comparable transaction valuation has become the “go-to source” of valuation information for groundwater assets in Texas. Part B elaborates on factors that may be used to adjust comparable transactions data to more closely reflect the factual situation of a specific asset being valued at a given point in time. Part C briefly discusses how groundwater has been priced to date, using publicly available transaction data covering various regions of Texas.


Collins, Gabriel. 2018. Groundwater Valuation in Texas: The Comparable Transactions Method. Baker Institute Report no. 03.20.18. Rice University’s Baker Institute for Public Policy, Houston, Texas.

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