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The Evolving Impact of the Ogallala Aquifer: Agricultural Adaptation to Groundwater and Climate

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  • Richard Hornbeck
  • Pinar Keskin

Abstract

Agriculture on the American Great Plains has been constrained by historical water scarcity. After World War II, technological improvements made groundwater from the Ogallala aquifer available for irrigation. Comparing counties over the Ogallala with nearby similar counties, groundwater access increased irrigation intensity and initially reduced the impact of droughts. Over time, land-use adjusted toward water-intensive crops and drought-sensitivity increased; conversely, farmers in water-scarce counties maintained drought-resistant practices that fully mitigated higher drought-sensitivity. Land values capitalized the Ogallala's value at $26 billion in 1974; as extraction remained high and water levels declined, the Ogallala's value fell to $9 billion in 2002.

Suggested Citation

  • Richard Hornbeck & Pinar Keskin, 2011. "The Evolving Impact of the Ogallala Aquifer: Agricultural Adaptation to Groundwater and Climate," NBER Working Papers 17625, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:17625
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    References listed on IDEAS

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    Cited by:

    1. Reena Badiani-Magnusson & Katrina Jessoe, 2018. "Electricity Prices, Groundwater, and Agriculture: The Environmental and Agricultural Impacts of Electricity Subsidies in India," NBER Chapters, in: Agricultural Productivity and Producer Behavior, pages 157-183, National Bureau of Economic Research, Inc.
    2. Sheetal Sekhri, 2013. "Missing Water: Agricultural Stress and Adaptation Strategies in Response to Groundwater Depletion in India," Virginia Economics Online Papers 406, University of Virginia, Department of Economics.
    3. Thiemo Fetzer, 2014. "Can Workfare Programs Moderate Violence? Evidence from India," STICERD - Economic Organisation and Public Policy Discussion Papers Series 053, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    4. Macours, Karen & Premand, Patrick & Vakis, Renos, 2012. "Transfers, Diversification and Household Risk Strategies: Experimental evidence with lessons for climate change adaptation," CEPR Discussion Papers 8940, C.E.P.R. Discussion Papers.
    5. 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.
    6. Shaneyfelt, Calvin R. & Schoengold, Dr. Karina, 2014. "Irrigation Demand in a Changing Climate: Using disaggregate data to predict future groundwater use," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170586, Agricultural and Applied Economics Association.
    7. Hansen, Zeynep K. & Lowe, Scott E. & Xu, Wenchao, 2014. "Long-term impacts of major water storage facilities on agriculture and the natural environment: Evidence from Idaho (U.S.)," Ecological Economics, Elsevier, vol. 100(C), pages 106-118.
    8. Mukherjee, Monobina & Schwabe, Kurt A., 2014. "Where's the salt? A spatial hedonic analysis of the value of groundwater to irrigated agriculture," Agricultural Water Management, Elsevier, vol. 145(C), pages 110-122.
    9. Ali Ajaz & Sumon Datta & Scott Stoodley, 2020. "High Plains Aquifer–State of Affairs of Irrigated Agriculture and Role of Irrigation in the Sustainability Paradigm," Sustainability, MDPI, vol. 12(9), pages 1-17, May.
    10. Guilfoos, Todd & Garnache, Cloe & Suter, Jordan F. & Merrill, Nathaniel H., 2017. "Efficiency Gains Arising from Dynamic Groundwater Markets," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258438, Agricultural and Applied Economics Association.
    11. Mukherjee, Monobina & Schwabe, Kurt A., 2012. "Valuing Access To Multiple Water Supply Sources In Irrigated Agriculture With A Hedonic Pricing Model," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124604, Agricultural and Applied Economics Association.
    12. Richard Hornbeck, 2012. "Nature versus Nurture: The Environment's Persistent Influence through the Modernization of American Agriculture," American Economic Review, American Economic Association, vol. 102(3), pages 245-249, May.
    13. Thiemo Fetzer, 2014. "Can Workfare Programs Moderate Violence? Evidence from India," STICERD - Economic Organisation and Public Policy Discussion Papers Series 53, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    14. Karen Macours & Patrick Premand & Renos Vakis, 2022. "Transfers, Diversification and Household Risk Strategies: Can Productive Safety Nets Help Households Manage Climatic Variability?," The Economic Journal, Royal Economic Society, vol. 132(647), pages 2438-2470.
    15. Kayla A. Cotterman & Anthony D. Kendall & Bruno Basso & David W. Hyndman, 2018. "Groundwater depletion and climate change: future prospects of crop production in the Central High Plains Aquifer," Climatic Change, Springer, vol. 146(1), pages 187-200, January.

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    JEL classification:

    • N52 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: 1913-
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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