Depletion, climate, and the incremental value of groundwater

Jordan Suter, Mani Rouhi Rad, Dale T. Manning, Christopher Goemans and Matthew R. Sanderson

Resource and Energy Economics, 2021, vol. 63, issue C

Abstract: Groundwater provides vital inputs to crop production and contributes to rural economies throughout the world. Research on the economic benefits associated with groundwater resources has typically focused on the impacts of groundwater availability on the profitability of agricultural production or on the non-market benefits associated with groundwater quality for human consumption. In this research, we use stated-preference methods to investigate the total economic value to agricultural producers of an increase in groundwater availability in the Ogallala Aquifer region. The contingent valuation method allows for estimation of values beyond agricultural profitability, including non-market values such as the ability to leave additional groundwater to future generations. We find a median willingness to pay (WTP) for an additional 100 gallons per minute of well capacity of $77 per well, and that this estimate depends strongly on current well capacity and climate conditions. For counties in hotter and drier regions of the aquifer with low well capacity, median WTP is significantly higher. These results are then used in conjunction with projections of future climate and groundwater availability to generate predicted changes in the WTP for additional groundwater across the aquifer. This research provides important feedback on how the benefits of additional groundwater availability are predicted to change as groundwater resources are diminished in a changing climate.

Keywords: Contingent valuation; Groundwater; Climate change; Ogallala Aquifer (search for similar items in EconPapers)
JEL-codes: Q25 Q51 Q54 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:63:y:2021:i:c:s0928765518303403

DOI: 10.1016/j.reseneeco.2019.101143

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