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Fixed Effects Estimation of the Intensive and Extensive Margins of Irrigation Water Demand

Author Info

  • Hendricks, Nathan P.
  • Peterson, Jeffrey M.

Abstract

Irrigation water demand is estimated using field-level panel data from Kansas over 16 years. The cost of pumping varies over time due to changes in energy prices and across space due to differences in the depth to water. Exploiting this variation allows us to estimate the demand elasticity while controlling for field-farmer and year fixed effects. Fixed effects also allow us to control for land use without an instrument or assumptions about the distribution of errors. Our estimates of water demand are used to calculate the cost of reducing irrigation water use through water pricing, irrigation cessation, and intensity-reduction programs.

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File URL: http://purl.umn.edu/122312
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Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

Volume (Year): 37 (2012)
Issue (Month): 1 (April)
Pages:

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Handle: RePEc:ags:jlaare:122312
Contact details of provider: Web page: http://waeaonline.org/
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Keywords: fixed effects; High Plains Aquifer; water demand; Environmental Economics and Policy; Resource /Energy Economics and Policy;

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  1. AfDB AfDB, . "AfDB Group Annual Report 2008," Annual Report, African Development Bank, number 64 edited by Koua Louis Kouakou.
  2. Jeffrey M. Peterson & Ya Ding, 2005. "Economic Adjustments to Groundwater Depletion in the High Plains: Do Water-Saving Irrigation Systems Save Water?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 147-159.
  3. Joshua D. Angrist, 2000. "Estimation of Limited-Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," NBER Technical Working Papers 0248, National Bureau of Economic Research, Inc.
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  8. Nataraj, Shanthi & Hanemann, W. Michael, 2011. "Does marginal price matter? A regression discontinuity approach to estimating water demand," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 198-212, March.
  9. Mansur, Erin T. & Mendelsohn, Robert & Morrison, Wendy, 2008. "Climate change adaptation: A study of fuel choice and consumption in the US energy sector," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 175-193, March.
  10. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 27-28, January.
  11. Beattie, Bruce R., 1981. "Irrigated Agriculture And The Great Plains: Problems And Policy Alternatives," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 6(02), December.
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Cited by:

  1. McFadden, Jonathan & Miranowski, John, . "Climate Change Impacts on the Intensive and Extensive Margins of US Agricultural Land," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170512, Agricultural and Applied Economics Association.
  2. Ashwell, Nicolas E. Quintana & Peterson, Jeffrey M., 2013. "The Impact of Irrigation Capital Subsidies on Common-pool Groundwater Use and Depletion: Results for Western Kansas," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150703, Agricultural and Applied Economics Association.
  3. Yorobe, Jose Jr & Pede, Valerien & Rejesus, Roderick & Velarde, Orlee & Wang, Huaiyu & Ali, Jauhar, 2014. "Yield and Income Effects of the Green Super Rice (GSR) Varieties: Evidence from a Fixed-Effects Model in the Philippines," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169635, Agricultural and Applied Economics Association.

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