SOCIAL CONTRACTS, MARKETS AND EFFICIENCY -- GROUNDWATER IRRIGATION IN NORTH INDIA

Abhijit Banerji, Gauri Khanna and J.V. Meenakshi
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Abhijit Banerji: Department of Economics, Delhi School of Economics, Delhi, India
Gauri Khanna: World Health Organization, Geneva

No 183, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: This paper uses primary data to analyze the institutions and informal markets that govern groundwater allocation in the principal sugarcane belt of North India. In contrast to earlier literature, we find that the observed water trades result in efficient water allocation across farms. We interpret this and other stylized facts in terms of a simple bargaining model with limited inter-player transfers. Poor functioning of the power sector leads to reduced pumping and a water supply constraint. Simulations show that power supply reform can significantly increase farm yields, be financed out of the increased farm profits, and provide an instrument to use for attaining intertemporal efficiency in water allocation.

Keywords: water markets; market structure; water production function. (search for similar items in EconPapers)
JEL-codes: L1 Q1 Q2 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2010-04
New Economics Papers: this item is included in nep-agr and nep-cwa
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Social contracts, markets and efficiency: Groundwater irrigation in North India (2012)
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