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Determinants of Water Sales During Droughts: Evidence from Rice Farm-Level Data in California

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  • Chaudhry, Anita M.
  • Fairbanks, Dean H.K.
  • Caldwell, Alyssa

Abstract

We estimate the effect of drought and opportunity to sell water to state-managed Drought Water Banks, on land fallowing patterns of rice farmers in three private surface water irrigation districts in Northern California. The analysis is based on 30 years (1984-2013) of spatial data derived from satellite data on fallowing decisions matched to highly detailed ownership data at the farm parcel level. We find that drought episodes, and the presence of a Drought Water Bank increase fallowed area and the likelihood to fallow. We examine the effect of each Drought Water Bank separately, finding significant differences among them. We also find that some water sale restrictions imposed by local or state authorities have significantly affected land fallowing. These findings have ramifications for water management in future California droughts.

Suggested Citation

  • Chaudhry, Anita M. & Fairbanks, Dean H.K. & Caldwell, Alyssa, 2015. "Determinants of Water Sales During Droughts: Evidence from Rice Farm-Level Data in California," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205446, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:205446
    DOI: 10.22004/ag.econ.205446
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    References listed on IDEAS

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    Cited by:

    1. Teresa Maestro & Barry J. Barnett & Keith H. Coble & Alberto Garrido & María Bielza, 2016. "Drought Index Insurance for the Central Valley Project in California," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(3), pages 521-545.

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