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

Author Info

Listed author(s):
  • 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. Wickens, Michael R, 1972. "A Note on the Use of Proxy Variables," Econometrica, Econometric Society, vol. 40(4), pages 759-761, July.
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  5. 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.
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  7. 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.
  8. West, Sarah E., 2004. "Distributional effects of alternative vehicle pollution control policies," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 735-757, March.
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  12. Sheila M. Olmstead, 2010. "The Economics of Managing Scarce Water Resources," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(2), pages 179-198, Summer.
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Cited by:

  1. Quintana-Ashwell, Nicolas E. & Peterson, Jeffrey M., 2014. "The Dynamic Impact of Technical Progress on Common-pool Groundwater Use and Depletion," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196891, Southern Agricultural Economics Association.
  2. Nicolas E. Quintana Ashwell & Jeffrey M. Peterson, 2016. "The Impact of Irrigation Capital Subsidies on Common-Pool Groundwater Use and Depletion: Results for Western Kansas," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 1-22, September.
  3. Hrozencik, Robert Aaron & Manning, Dale T., 2016. "Groundwater Management Policy Evaluation with a Spatial-Dynamic Hydro-Economic Modelling Framework," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236116, Agricultural and Applied Economics Association.
  4. Suarez, Federico & Fulginiti, Lilyan & Perrin, Richard, 2015. "The Value of Water in Agriculture: The U.S. High Plains Aquifer," 2015 Conference, August 9-14, 2015, Milan, Italy 211644, International Association of Agricultural Economists.
  5. Li, Haoyang & Zhao, Jinhua, 2016. "Rebound Effect of Irrigation Technologies? The Role of Water Rights," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235966, Agricultural and Applied Economics Association.
  6. Xie, Yang & Zilberman, David, 2015. "Water-Storage Capacities versus Water-Use Efficiency: Substitutes or Complements?," 2015 Conference, August 9-14, 2015, Milan, Italy 211894, International Association of Agricultural Economists.
  7. Savage, Jeff & Ifft, Jennifer, 2015. "The Impact of Irrigation Restrictions on Cropland Values in Nebraska," Working Papers 250021, Cornell University, Department of Applied Economics and Management.
  8. 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.
  9. McFadden, Jonathan & Miranowski, John, "undated". "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.
  10. Feike, Til & Henseler, Martin, 2017. "Multiple Policy Instruments for Sustainable Water Management in Crop Production - A Modeling Study for the Chinese Aksu-Tarim Region," Ecological Economics, Elsevier, vol. 135(C), pages 42-54.
  11. Wang, Tong & Park, Seong & Jin, Hailong, 2016. "Will Farmers Save Water? A Theoretical Analysis of Groundwater Conservation Policies for Ogallala Aquifer," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229904, Southern Agricultural Economics Association.
  12. Quintana-Ashwell, Nicolas E. & Peterson, Jeffrey M., 2015. "Aquifer Depletion in the face of Climate Change and Technical Progress," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205882, Agricultural and Applied Economics Association;Western Agricultural Economics Association.

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