Efficiency of Viable Groundwater Management Policies

Todd Guilfoos, Neha Khanna and Jeffrey M. Peterson

Article Figures & Data

Figures

Tables

  • TABLE 1

    Summary of Ogallala Aquifer Parameters

    SymbolDescriptionValue
    INumber of farmers2,088
    NNumber of cells in aquifer8,457
    RiAverage natural recharge of each cell in aquifer (acre-feet per year)35.48 (max = 75.99; min = 26.67)
    AiSurface area of aquifer of each cell (acres)625
    SSpecific yield (unitless)0.17
    KiAverage hydraulic conductivity for each cell (feet/year)23,393 (max = 73,000; min = 3,394)
    CA0Average cross sectional area of each cell at time 0 (acres)6.33 (max = 21.21; min = 0)
    dDistance between centroids of adjacent cells (feet)5,217
    LSiAverage elevation of a cell (feet)3,102 (max = 4,024; min = 2,104)
    giAverage farmer demand intercept (acre-feet)178.84 (max = 1,022.31; min = 0.22)
    kiAverage farmer demand slope (acre-feet)–0.66 (max = –0.001; min = –0.17)
    C1aCost increase of pumping from a one foot change in height ($/acre-foot of lift)0.1044
    αReturn coefficient to well0.20
    rRate of time preference0.03
    TTime period length (year)90
    δMinimum saturated thickness for a farmer to pump water (feet)10
    • a The cost is calculated using parameters from Hendricks and Peterson (2012), the average price of gas ($/Mcf), $4.68, and the amount of natural gas used to lift 1 acre-foot of water 1 foot high, 0.0223 (Mcf).

  • TABLE 2

    Water Demand Statistics

    MeanStd. Dev.
    Applied water per acre (feet)1.11070.4501
    Cost of pumping (dollars per acre-foot)13.36206.5895
    January–April precipitation (inches)3.56582.0579
    May–August precipitation (inches)11.46024.8201
    May–August evapotranspiration (inches)37.52386.0554
  • TABLE 3

    Water Demand Estimates

    Dependent Variable: Applied Water per Acre
    Cost of pumping ($/acre-foot)-0.00395*** (0.0014)
    January–April precipitation0.0041 (0.0063)
    May–August precipitation-0.0039 (0.0029)
    May–August evapotranspiration-0.0023 (0.0032)
    Observations29,177
    R20.4003
    Number of groups1,473
    • Note: Standard errors are in parentheses, and coefficients on time fixed effects are not reported.

    • *** Variables significant at 1%.

  • TABLE 4

    Results Summary Statistics

     % Gain in Discounted Farmer’s Net Benefits
    (1)(2)(3)(4)(5)(6)
    FTVTQRWater Market with
    FT Quantities
    Water Market with
    VT Quantities
    Water Market with
    QR
    Total gain1.021.060.000.990.990.11
    Minimum–100.00−100.00−1.99−100.00−100.00−6.73
    Maximum720.73722.339.447,071.90189.795,469.07
    Average0.340.38−0.0163.860.0910.75
    Median–0.23−0.200.0011.51−0.510.00
    • Note: FT, flat tax; QR, quantity restrictions; VT, variable tax.

  • TABLE 5

    Local Enhanced Management Area SD-6 HPA Results (percent)

    Aquifer-wide
    FT
    SD-6 HPA FTAquifer-wide
    QR
    SD-6 HPA QRSD-6 Water
    Market with FT Quantities
    SD-6 Water
    Market with QR Quantities
    Optimal FT547%1,362%
    Optimal QR98%32%
    Total gain5.63%7.25%0.01%8.81%8.16%11.55%
    Minimum-5.57%-32.01%0.00%-21.66%-41.76%-46.25%
    Maximum26.88%15.54%0.00%25.67%26.54%25.57%
    Average5.14%6.76%0.01%9.44%7.17%10.40%
    Median4.77%7.84%0.00%13.75%10.37%14.37%
    • Note: The results here are the percent gains by the group of farmers in SD-6 HPA, under locally focused policies and aquifer-wide policies. FT, flat tax; QR, quantity restriction.

  • TABLE 6

    Drivers of Discounted Welfare Gains

     Dependent Variable: % Gain from Policy
    FT (1)FT (2)WMFT (3)WMFT (4)
    % gains > 0NoYesNoYes
    Acreage irrigated7.61E–055.65E–043.95E–04***3.37E–03*
    Saturated thickness−6.44E–04**−8.74E–03***−1.82E–03***−7.23E–02***
    Lift−4.75E–04**2.31E–034.90E–042.05E–02**
    Hydraulic conductivity−3.60E–062.02E–057.06E–061.36E–04
    Recharge5.35E–041.78E–02−5.78E–03−1.48E–01*
    Neighbor’s irrigated acres1.70E–053.59E–05−4.98E–05−9.99E–04**
    Elevation1.49E–04−1.45E–041.69E–03***6.09E–03
    Water demand intercept1.12E–01***2.24E–021.15E–02−4.14E+00***
    Well dried up−1.59E–022.48E–02−3.50E–02*1.29E+00***
    Acreage irrigated sq.−3.72E–07***−5.13E–07−9.20E–07***−4.16E–07
    Saturated thickness sq.4.54E–06***4.65E–05***5.98E–06*3.16E–04***
    Lift sq.1.19E–07−4.03E–06−7.92E–06−1.43E–04*
    Hydraulic conductivity sq.1.55E–10−6.46E–10−2.56E–10−5.48E–09
    Recharge sq.−9.18E–06−2.29E–041.95E–04***2.10E–03**
    Neighbor’s irrigated acres sq.2.15E–11−1.85E–081.66E–083.53E–07**
    Elevation sq.−3.13E–08*2.05E–08−2.40E–07***−7.82E–07
    Observations1,5375016471,391
    R20.22470.08750.13510.2194
    • Note: FT, flat tax; WMFT, water markets with flat tax quantities.

    • *, **, *** Variables significant at 10%, 5%, and 1%, respectively.