The Effects of Well Management and the Nature of the Aquifer on Groundwater Resources

This paper examines how the nature of a common property resource affects the effectiveness of community-based management on resource conservation. We focus on groundwater management in rural China because there are different types of community-based groundwater management in different communities. In some communities wells are collectively owned and the community leader allocates water among households. In our paper we call this collective well management. In other communities wells are privately owned and households make their own pumping decisions. We call this private well management. In comparing the effects of different types of well management on the groundwater resource, unlike previous studies, we control for the nature of the aquifer. Communities are divided into two additional grouping based on the nature of the aquifer: connected communities whose aquifers are connected to neighboring communities due to lateral groundwater flows; and isolated communities that are hydrologically isolated. Results indicate that whether community-based management is adequate for resource conservation depends crucially on the nature of the aquifer. Empirical analysis using a unique set of household level data shows that households located in isolated communities use less water than households in connected communities, controlling for the type of well management. Furthermore, results show that in isolated communities households under collective well management use 20% less water than households under private well management. In connected communities, however, no difference in water use is observed between collective well management and private well management.