Expected Utility, Benefit, and Loss Criteria for Seasonal Water Supply Planning

This paper synthesizes the state‐of‐the‐art in modeling of the decision criteria for seasonal water supply planning under uncertainty, with particular focus on irrigation supply. We review, compare, and contrast three types of criterion functions: a utility function, a benefit function, and an opportunity loss function. Economic and preferential conditions imbedded in each function are identified. Theoretical relationships between these functions are established and illustrated using real data. The result of this synthesis is a methodological framework that unifies the three types of functions and offers analysts a systematic approach to choosing an appropriate decision criterion.