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The design of efficient water allocation systems depends, among other factors, on economic issues and, above all, on a reliable estimate of the economic value of water. In this paper the hedonic price method is utilized to reveal the implicit value of irrigation water by analyzing agricultural land values in Chalkidiki, a typical rural area in Greece. The method was applied to a sample of both irrigated and nonirrigated properties and the value of irrigation water was estimated by disaggregating the total price of each parcel of land, obtained through a local survey. Results show that, apart from typical value attributes, the agricultural characteristics of the land, including irrigation water availability, have a significant influence on land prices.