PT  - JOURNAL ARTICLE
AU  - Cutter, W. Bowman
TI  - Valuing Groundwater Recharge in an Urban Context
AID  - 10.3368/le.83.2.234
DP  - 2007 May 01
TA  - Land Economics
PG  - 234--252
VI  - 83
IP  - 2
4099  - http://le.uwpress.org/content/83/2/234.short
4100  - http://le.uwpress.org/content/83/2/234.full
SO  - Land Econ2007 May 01; 83
AB  - Urbanization often creates waterrelated externalities such as increased flooding and decreased groundwater recharge. Decreased recharge can lead to the diminution of potentially valuable groundwater. Groundwater’s ability to buffer water-supply shocks may be a substantial component of the value of groundwater stock. I argue that in urban contexts, autoregressive rather than i.i.d. stochastic processes are a better characterization of water supply processes. Data for the Los Angeles area suggests that an autoregressive process is a better approximation of water supply processes than alternative processes and produces economically and statistically significantly different estimates of buffer and groundwater stock values. (JEL Q25, Q32)