Empirical Assessment of the quantity-quality tradeoff for the Ogallala: A case study from West Texas

Sanchari Ghosh () and Keith Willett ()
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Sanchari Ghosh: Oklahoma State University
Keith Willett: Oklahoma State University

No 1201, Economics Working Paper Series from Oklahoma State University, Department of Economics and Legal Studies in Business

Abstract: The High Plains region in West Texas has been the focus of water conservation policies for the last two decades because of rapid depletion of groundwater in this region. Groundwater is the only source of irrigation in this region of Texas with Ogallala serving as the major aquifer. In recent times, however, attent ion has been drawn on nitrate pollution of the Ogallala aquifer, though no study or research report has come up with a joint management solution to cope with both of these problems. This research attempts to fill this gap, taking the rural county of Castro as a case study. The main objective is to make an empirical assessment of this tradeoff by capturing the dynamic behavior of the stock of groundwater as well as the stock of pollutant over a twenty year period. Two sets of policies are developed to control the impact of excess fertilizer use on the groundwater and to evaluate the effect on the net present value of production. First a constraint is imposed on the use of nitrogen fertilizer per acre; second, the price of nitrogen fertilizer is raised successively by 5% and 10%. Secondly, certain policies aimed at raising the volume of water in storage such as restricting the use of irrigation water by around 0.50 acre-inch per acre from the base solution as well as buying out water rights also show positive results in terms of water quantity and quality. Restriction on the terminal value of saturated thickness (or the water table) as well as buying out water rights show a 7 and 4 mg/l increase in the stock of pollutant with a saturated thickness decline by 6 feet less than the base level.

Keywords: Extraction; pollution; constraint; quota; buyout (search for similar items in EconPapers)
JEL-codes: Q1 Q3 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2012
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