Groundwater Pumping by Heterogeneous Users

Alexander Saak () and Jeffrey Peterson

No 9798, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Farm size is a significant determinant of both groundwater irrigated farm acreage and groundwater irrigation application rates per acre. This paper analyzes the patterns of groundwater exploitation when resource users in the area overlying a common aquifer are heterogeneous. In the presence of user heterogeneity, the common resource problem consists of inefficient dynamic and spatial allocation of groundwater because it impacts income distribution not only across periods but also across farmers. Under competitive allocation, smaller farmers pump groundwater faster if farmers have a constant marginal periodic utility of income. However, it is possible that larger farmers pump faster if the Arrow-Pratt coefficient of relative risk-aversion is sufficiently decreasing in wealth. A greater farm-size inequality may either moderate or amplify income inequality among farmers. Its effect on welfare depends on the curvature properties of the agricultural output function and the farmer utility of income. Also, it is shown that a flat-rate quota policy that limits the quantity of groundwater extraction per unit land may have unintended consequences for the income distribution among farmers.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 33
Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://ageconsearch.umn.edu/record/9798/files/sp07sa02.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea07:9798

DOI: 10.22004/ag.econ.9798

Access Statistics for this paper

More papers in 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().