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Rebound Effects of New Irrigation Technologies: The Role of Water Rights

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  • Haoyang Li
  • Jinhua Zhao

Abstract

We study how institutions such as water rights can complement new irrigation technologies in promoting the sustainability of U.S. agriculture. Using data from the Ogallala-High Plains Aquifer region of Kansas, we find that water extraction moderately increases after adopting Low Energy Precise Application (LEPA) irrigation, and this rebound effect is in general higher for farmers with larger water rights. About half of the LEPA’s rebound effects arise because adopters tend to irrigate more land and grow more water-intensive crops, with the remaining half attributable to more intensive irrigation. Farmers with greater water rights use more water, with two-thirds of the effects arising from irrigating larger land areas, and one-third of the effects attributable to more intensive irrigation. A 10% reduction of water rights will reduce water use by 5% in the long run, and if the reduction targets the majority of the water rights, which lie between 100 and 500 AF, LEPA’s rebound effect decreases by 15.4%. Finally, we find that farmers have an incentive to apply a small amount of water in order to preserve their water rights, but the associated water waste is insignificant.

Suggested Citation

  • Haoyang Li & Jinhua Zhao, 2018. "Rebound Effects of New Irrigation Technologies: The Role of Water Rights," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(3), pages 786-808.
    • Handle: RePEc:oup:ajagec:v:100:y:2018:i:3:p:786-808.
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    Cited by:

    1. Cao, Zhaodan & Zhu, Tingju & Cai, Ximing, 2023. "Hydro-agro-economic optimization for irrigated farming in an arid region: The Hetao Irrigation District, Inner Mongolia," Agricultural Water Management, Elsevier, vol. 277(C).
    2. Ali, Saif & Arora, Gaurav, 2021. "Well-level Missingness Mechanisms in Administrative Groundwater Monitoring Data for Uttar Pradesh (UP), India, 2009-2018," 2021 Annual Meeting, August 1-3, Austin, Texas 314038, Agricultural and Applied Economics Association.
    3. Xu, Hang & Song, Jianfeng, 2022. "Drivers of the irrigation water rebound effect: A case study of Hetao irrigation district in Yellow River basin, China," Agricultural Water Management, Elsevier, vol. 266(C).
    4. Mallawaarachchi, Thilak & Auricht, Christopher & Loch, Adam & Adamson, David & Quiggin, John, 2020. "Water allocation in Australia’s Murray–Darling Basin: Managing change under heightened uncertainty," Economic Analysis and Policy, Elsevier, vol. 66(C), pages 345-369.
    5. Yingchun Ge & Jing Wang, 2024. "The Water Resources Rebound Effect Threatening the Achievement of Sustainable Development Goal 6 (SDG 6)," Sustainability, MDPI, vol. 16(10), pages 1-14, May.
    6. Fei, Rilong & Xie, Mengyuan & Wei, Xin & Ma, Ding, 2021. "Has the water rights system reform restrained the water rebound effect? Empirical analysis from China's agricultural sector," Agricultural Water Management, Elsevier, vol. 246(C).
    7. Zhen, Wei & Qin, Quande & Miao, Lu, 2023. "The greenhouse gas rebound effect from increased energy efficiency across China's staple crops," Energy Policy, Elsevier, vol. 173(C).
    8. Gabriel S. Sampson & Edward D. Perry, 2019. "Peer effects in the diffusion of water‐saving agricultural technologies," Agricultural Economics, International Association of Agricultural Economists, vol. 50(6), pages 693-706, November.
    9. Thomas Slijper & Yann de Mey & P Marijn Poortvliet & Miranda P M Meuwissen, 2022. "Quantifying the resilience of European farms using FADN," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(1), pages 121-150.
    10. Louis Sears & Joseph Caparelli & Clouse Lee & Devon Pan & Gillian Strandberg & Linh Vuu & C. -Y. Cynthia Lin Lawell, 2018. "Jevons’ Paradox and Efficient Irrigation Technology," Sustainability, MDPI, vol. 10(5), pages 1-12, May.
    11. Zanello, Giacomo & Shankar, Bhavani & Poole, Nigel, 2019. "Buy or make? Agricultural production diversity, markets and dietary diversity in Afghanistan," Food Policy, Elsevier, vol. 87(C), pages 1-1.
    12. Bernhard Dalheimer & Christoph Kubitza & Bernhard Brümmer, 2022. "Technical efficiency and farmland expansion: Evidence from oil palm smallholders in Indonesia," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1364-1387, August.
    13. Qian Chen & Jaume Freire González & Donglan Zha, 2023. "The Gap between Expectations and Reality: Assessing the Water Rebound Effect in Chinese Agriculture," Working Papers 1415, Barcelona School of Economics.
    14. Dietrich Earnhart & Nathan P. Hendricks, 2023. "Adapting to water restrictions: Intensive versus extensive adaptation over time differentiated by water right seniority," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(5), pages 1458-1490, October.
    15. Jaah, Mkupete & Fintel, Dieter von & Burger, Ronelle, 2021. "Maize Price Shock, Agriculture Production and Children Nutrition Outcomes in Tanzania," 2021 Conference, August 17-31, 2021, Virtual 314974, International Association of Agricultural Economists.
    16. Hang Xu & Rui Yang & Jianfeng Song, 2021. "Agricultural Water Use Efficiency and Rebound Effect: A Study for China," IJERPH, MDPI, vol. 18(13), pages 1-16, July.
    17. Lee, Juhee & Hendricks, Nathan, 2022. "Irrigation Decisions in Response to Groundwater Salinity in Kansas," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(3), September.
    18. Zhang, Cheng-Yao & Oki, Taikan, 2023. "Water pricing reform for sustainable water resources management in China’s agricultural sector," Agricultural Water Management, Elsevier, vol. 275(C).
    19. Bertone Oehninger, Ernst & Lin Lawell, C.-Y. Cynthia, 2021. "Property rights and groundwater management in the High Plains Aquifer," Resource and Energy Economics, Elsevier, vol. 63(C).
    20. Guifang Li & Dingyang Zhou & Minjun Shi, 2019. "How Do Farmers Respond to Water Resources Management Policy in the Heihe River Basin of China?," Sustainability, MDPI, vol. 11(7), pages 1-19, April.
    21. Shew, Aaron M. & Nalley, Lawton L. & Durand-Morat, Alvaro & Meredith, Kylie & Parajuli, Ranjan & Thoma, Greg & Henry, Christopher G., 2021. "Holistically valuing public investments in agricultural water conservation," Agricultural Water Management, Elsevier, vol. 252(C).
    22. Sebastian Lieder & Christoph Schröter-Schlaack, 2021. "Smart Farming Technologies in Arable Farming: Towards a Holistic Assessment of Opportunities and Risks," Sustainability, MDPI, vol. 13(12), pages 1-20, June.

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