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Production Externalities and the Gains from Management in a Spatially-Explicit Aquifer

Author

Listed:
  • Manning, Dale T.
  • Suter, Jordan F.

Abstract

Groundwater is a valuable input to agricultural production in many areas, but its use imposes external costs on nearby producers. Little attention has been given to externalities that directly affect groundwater productivity. We develop a dynamic, spatially-explicit model of groundwater use that allows changes in saturated thickness to affect both the pumping cost and productivity of nearby wells.We compare gains from coordinated, socially optimal groundwater use to those that result from a user pursuing unilateral optimization. For wells with average saturated thickness, both unilateral and coordinated optimization can moderately increase the net present value of resource rents.

Suggested Citation

  • Manning, Dale T. & Suter, Jordan F., 2019. "Production Externalities and the Gains from Management in a Spatially-Explicit Aquifer," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 44(1), January.
    • Handle: RePEc:ags:jlaare:281320
    DOI: 10.22004/ag.econ.281320
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    Citations

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    Cited by:

    1. Stahn, Hubert & Tomini, Agnes, 2021. "Externality and common-pool resources: The case of artesian aquifers," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    2. Rouhi Rad, Mani & Brozović, Nicholas & Foster, Timothy & Mieno, Taro, 2020. "Effects of instantaneous groundwater availability on irrigated agriculture and implications for aquifer management," Resource and Energy Economics, Elsevier, vol. 59(C).
    3. Sampson, Gabriel S. & Al-Sudani, Amer & Bergtold, Jason, 2021. "Local irrigation response to ethanol expansion in the High Plains Aquifer," Resource and Energy Economics, Elsevier, vol. 66(C).
    4. Rouhi Rad, Mani & Haacker, Erin M.K. & Sharda, Vaishali & Nozari, Soheil & Xiang, Zaichen & Araya, A. & Uddameri, Venkatesh & Suter, Jordan F. & Gowda, Prasanna, 2020. "MOD$$AT: A hydro-economic modeling framework for aquifer management in irrigated agricultural regions," Agricultural Water Management, Elsevier, vol. 238(C).
    5. Perez-Quesada, Gabriela & Hendricks, Nathan P. & Steward, David R., 2020. "Quantifying the economic costs of High Plains Aquifer depletion," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304225, Agricultural and Applied Economics Association.
    6. Antoci, Angelo & Iannucci, Gianluca & Rocchi, Benedetto & Ticci, Elisa, 2023. "The land allocation game: Externalities and evolutionary competition," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 124-133.
    7. Manning, Dale T. & Rad, Mani Rouhi & Suter, Jordan F. & Goemans, Christopher & Xiang, Zaichen & Bailey, Ryan, 2020. "Non-market valuation in integrated assessment modeling: The benefits of water right retirement," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).

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