The report has been designed as a small input into the present review of the resource use statutes. As conflict between competing or potentially competing users of water has become more common, there is a need to review the manner in which we allocate water resources in New Zealand. An alternative resource allocation mechanism to the present administrative system is a market mechanism. The report examines theoretical literature on transferable property rights to water and the actual experience New Zealand has had with a water market. Drawn from the analysis are several policy recommendations on the form of the institutional structure a water market could take in New Zealand. The views expressed in this paper are the responsibility of the author and do not necessarily reflect those of the New Zealand Treasury.