Estimating Agricultural Acreage Responses to Input Prices: Groundwater in California

Andrew Stevens

No 266691, 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida from Southern Agricultural Economics Association

Abstract: How does agricultural land use respond to variation in the price of agricultural water? Answering this question is difficult in California where there is no well-functioning market for water. To overcome this challenge, I use variation in groundwater depth over space and time to proxy for the price of water. This makes sense in a setting where groundwater pumping is unregulated, meaning the effective price of pumped groundwater is the energy cost to pump it. I construct a panel of agricultural fields in Fresno County, California from 2008 to 2016, and estimate a fixed effects model to estimate groundwater depth's effect on transition probabilities between different categories of land cover. I find that groundwater depth reduces the likelihood that parcels will be planted to an annual crop, but increases the likelihood of fallowing land. Groundwater depth seems to have a less profound effect on choosing to plant perennial crops.

Keywords: Agricultural and Food Policy; Environmental Economics and Policy; Land Economics/Use; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Date: 2018-01-17
New Economics Papers: this item is included in nep-agr and nep-env
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Related works:
Chapter: Estimating Agricultural Acreage Responses to Input Prices: Groundwater in California (2023)
Working Paper: Estimating Agricultural Acreage Responses to Input Prices: Groundwater in California (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saea18:266691

DOI: 10.22004/ag.econ.266691

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