Estimating irrigation demand in the Ogallala Aquifer: Measured vs. Surveyed data

Harikrishnan Santhosh and Jeffrey Mullen

No 404399, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: Water pricing is among the most widely advocated tools among economists for managing aquifer depletion, yet its effectiveness hinges on a single parameter: the own-price elasticity of irrigation water demand. If farmers are unresponsive to price signals (that is, if demand is inelastic), pricing policies will fail to achieve conservation goals while imposing substantial costs on agricultural producers. Producing accurate elasticity estimates is therefore not an academic exercise; it is a prerequisite for effective water governance in stressed aquifer systems. Past studies have found a broad spectrum of irrigation demand elasticities ranging from highly inelastic to elastic, especially at the extensive margin. This paper addresses a critical but underexplored source of estimation error: data quality. The majority of studies estimating irrigation demand rely on the USDA's Irrigation Water Management Survey (IWMS), which consists of repeated cross-sectional surveys subject to omitted variable bias and measurement error. We compare elasticity estimates derived from this survey data against those from metered water use records drawn from Kansas's Water Information Management and Analysis System (WIMAS), which captures measured pumping data.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 13
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404399

DOI: 10.22004/ag.econ.404399

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