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Way Down in the Hole: Adaptation to Long-Term Water Loss in Rural India

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  • David Blakeslee
  • Ram Fishman
  • Veena Srinivasan

Abstract

Worsening environmental conditions threaten to undermine progress in reducing rural poverty. Little is known, however, about the prospects for farmer adaptations to mitigate this threat, in particular through opportunities for income diversification presented by recent non-agricultural growth. We study the effects of increasing water scarcity in India using quasi-random, geologically determined differences in access to groundwater. The drying up of wells results in a precipitous and persistent decline in farm income and wealth, with little evidence of agricultural adaptation. However, labor reallocation to off-farm employment appears successful in maintaining overall income, particularly in locations with a more developed manufacturing sector.

Suggested Citation

  • David Blakeslee & Ram Fishman & Veena Srinivasan, 2020. "Way Down in the Hole: Adaptation to Long-Term Water Loss in Rural India," American Economic Review, American Economic Association, vol. 110(1), pages 200-224, January.
    • Handle: RePEc:aea:aecrev:v:110:y:2020:i:1:p:200-224
    DOI: 10.1257/aer.20180976
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    More about this item

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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