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Economic Efficiency of Short-Term Versus Long-Term Water Rights Buyouts

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  • Wheeler, Erin
  • Golden, Bill
  • Johnson, Jeffrey
  • Peterson, Jeffrey

Abstract

Because of the decline of the Ogallala Aquifer, water districts, regional water managers, and state water officers are becoming increasingly interested in conservation policies. This study evaluates both short-term and long-term water rights buyout policies. This research develops dynamic production functions for the major crops in the Texas Panhandle. The production functions are incorporated into optimal temporal allocation models that project annual producer behavior, crop choices, water use, and aquifer declines over 60 years. Results suggest that long-term buyouts may be more economically efficient than short-term buyouts.

Suggested Citation

  • Wheeler, Erin & Golden, Bill & Johnson, Jeffrey & Peterson, Jeffrey, 2008. "Economic Efficiency of Short-Term Versus Long-Term Water Rights Buyouts," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(2), pages 493-501, August.
    • Handle: RePEc:cup:jagaec:v:40:y:2008:i:02:p:493-501_02
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    References listed on IDEAS

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    1. Michael D. Frank & Bruce R. Beattie & Mary E. Embleton, 1990. "A Comparison of Alternative Crop Response Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 597-603.
    2. Michael Nieswiadomy, 1985. "The Demand for Irrigation Water in the High Plains of Texas, 1957–80," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 619-626.
    3. Gisser, Micha, 1983. "Groundwater: Focusing on the Real Issue," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 1001-1027, December.
    4. Eli Feinerman & Keith C. Knapp, 1983. "Benefits from Groundwater Management: Magnitude, Sensitivity, and Distribution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(4), pages 703-710.
    5. Micha Gisser & Abraham Mercado, 1973. "Economic Aspects of Ground Water Resources and Replacement Flows in Semiarid Agricultural Areas," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 55(3), pages 461-466.
    6. Supalla, Ray & McMullen, Brian & Buell, Tom, 2006. "The Cost of Reducing Irrigation," Cornhusker Economics 306469, University of Nebraska-Lincoln, Department of Agricultural Economics.
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    Cited by:

    1. Biswa Das & David Willis & Ken Rainwater, 2013. "An interdisciplinary regional groundwater model: A study of the Ogallala in the Texas High Plains," Regional Science Policy & Practice, Wiley Blackwell, vol. 5(1), pages 113-133, March.
    2. Wang, Tong & Park, Seong & Jin, Hailong, 2016. "Will Farmers Save Water? A Theoretical Analysis of Groundwater Conservation Policies for Ogallala Aquifer," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229904, Southern Agricultural Economics Association.
    3. Ding, Ya & Peterson, Jeffrey M., 2012. "Comparing the Cost-Effectiveness of Water Conservation Policies in a Depleting Aquifer: A Dynamic Analysis of the Kansas High Plains," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 44(2), pages 223-234, May.
    4. Deines, Jillian M. & Schipanski, Meagan E. & Golden, Bill & Zipper, Samuel C. & Nozari, Soheil & Rottler, Caitlin & Guerrero, Bridget & Sharda, Vaishali, 2020. "Transitions from irrigated to dryland agriculture in the Ogallala Aquifer: Land use suitability and regional economic impacts," Agricultural Water Management, Elsevier, vol. 233(C).
    5. Kovacs, Kent & Popp, Michael & Bryce, Kristofer & West, Grant, 2015. "On-Farm Reservoir Adoption in the Presence of Spatially Explicit Groundwater Use and Recharge," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(1), pages 1-27.
    6. Boyer, Christopher N. & Adams, Damian C. & Borisova, Tatiana, 2014. "Drivers of Price and Nonprice Water Conservation by Urban and Rural Water Utilities: An Application of Predictive Models to Four Southern States," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(1), pages 1-16, February.
    7. repec:ags:joaaec:163080 is not listed on IDEAS
    8. Fan, Yubing & Park, Seong C., 2018. "A Meta-analysis of Water Conservation Policies in the Southern Ogallala Aquifer Region," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266656, Southern Agricultural Economics Association.

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    More about this item

    JEL classification:

    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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