PT  - JOURNAL ARTICLE
AU  - Mieno, Taro
AU  - Rad, Mani Rouhi
AU  - Suter, Jordan F.
AU  - Hrozencik, R. Aaron
TI  - The Importance of Well Yield in Groundwater Demand Specifications
AID  - 10.3368/le.97.3.672
DP  - 2021 Aug 01
TA  - Land Economics
PG  - 672--687
VI  - 97
IP  - 3
4099  - http://le.uwpress.org/content/97/3/672.short
4100  - http://le.uwpress.org/content/97/3/672.full
SO  - Land Econ2021 Aug 01; 97
AB  - Implementing effective resource management policies critically depends on accurate estimates of the price elasticity of resource demand. In the case of groundwater, previous research estimating well-level groundwater demand has largely neglected the importance of well yield, which is a physical limit on the rate of groundwater extraction. In this study, we empirically estimate the price elasticity of demand for groundwater using well-level data from Colorado. Our results demonstrate that when well yield is omitted, price elasticity is overestimated. This in turn creates inaccurate predictions of the effect of price-based conservation policies on groundwater use and welfare.