Does Pumping Pay: Groundwater Management Institutions and Cropland Values in Nebraska?

Jeffrey Savage and Jennifer Ifft

No 150581, 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. from Agricultural and Applied Economics Association

Abstract: Conflicts over agricultural water use have been an issue in the western United States and worldwide since the widespread development of irrigation. Water management institutions serve to ration scare water resources, but can impose costs on water uses. These costs can be difficult to measure as water rights are often not tradable. The option value of irrigation, or the costs imposed when producers lose the unused right to irrigate, is especially difficult to measure. This study measures the value of pumping rights under different management institutions in Nebraska. We take advantage of temporal and spatial variation in water management across the state, as well as unique plot level data that incorporate information on cropland values, irrigation status, and physical characteristics. Preliminary results indicate that irrigation rights substantially increase cropland values, and hence likely contribute significantly to farm income.

Keywords: Land Economics/Use; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 16
Date: 2013
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea13:150581

DOI: 10.22004/ag.econ.150581

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