RT Journal Article
SR Electronic
T1 Agricultural Water Trading Restrictions and Drought Resilience
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 473
OP 493
DO 10.3368/le.95.4.473
VO 95
IS 4
A1 Bigelow, Daniel P.
A1 Chaudhry, Anita M.
A1 Ifft, Jennifer
A1 Wallander, Steven
YR 2019
UL http://le.uwpress.org/content/95/4/473.abstract
AB Policies that seek to reduce groundwater open-access externalities may be in conflict with the facilitation of water trading during droughts. Using panel data on cropland values, we examine this interaction in the context of groundwater export restrictions. We find that land subject to restrictions experienced a relative decline of 34% ($2,057/acre, roughly half of foregone potential water sales revenue) during the drought immediately following implementation of the policies. During a later, more severe drought, there is no difference in value. Our empirical approach also provides novel estimates of the value of changes in groundwater stock. (JEL Q15, Q18)