Does Agriculture Generate Local Economic Spillovers? Short-run and Long-run Evidence from the Ogallala Aquifer

Richard Hornbeck and Pinar Keskin (pkeskin@wellesley.edu)

No 18416, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Agricultural development may support broader economic development, though agricultural expansion may also crowd-out local non-agricultural activity. On the United States Plains, areas over the Ogallala aquifer experienced windfall agricultural gains when post-WWII technologies increased farmers' access to groundwater. Comparing counties over the Ogallala with nearby similar counties, local non-agricultural sectors experienced only short-run benefits. Despite substantial persistent agricultural gains, there was no long-run expansion of local non-agricultural sectors and there are some indications of crowd-out. With the benefit of long-run historical perspective, supporting local agricultural production does not appear to generate local economic spillovers that might justify its distortionary impacts.

JEL-codes: N32 N52 O10 Q10 R10 (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-agr
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Published as Richard Hornbeck & Pinar Keskin, 2015. "Does Agriculture Generate Local Economic Spillovers? Short-Run and Long-Run Evidence from the Ogallala Aquifer," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 192-213, May.

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