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Benefits from Groundwater Management: Magnitude, Sensitivity, and Distribution


  • Eli Feinerman
  • Keith C. Knapp


Empirical estimates of benefits from groundwater management are reported for an area in California with heavy reliance on groundwater supplies. Benefits are quite sensitive to the water demand schedule and interest rate but less sensitive to other parameters. However, in all cases considered the increases in welfare from groundwater management are less than ten percent. Tax revenues received under a system of pump taxes are four to five times as large as the benefits from management. Thus, groundwater users gain under a system of quotas but may suffer substantial welfare losses under pump taxes.

Suggested Citation

  • Eli Feinerman & Keith C. Knapp, 1983. "Benefits from Groundwater Management: Magnitude, Sensitivity, and Distribution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(4), pages 703-710.
  • Handle: RePEc:oup:ajagec:v:65:y:1983:i:4:p:703-710.

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    Cited by:

    1. Yeboah, Osei-Agyeman & Supalla, Raymond J. & Martin, Derrel L., 1999. "Welfare Differences Between Gross Water Pumped And Consumptive Use As Alternative Policy Control Variables To Meet Aquifer Management Objectives," 1999 Annual meeting, August 8-11, Nashville, TN 21528, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Claudia Heidecke & Thomas Heckelei, 2010. "Impacts of changing water inflow distributions on irrigation and farm income along the DrĂ¢a River in Morocco," Agricultural Economics, International Association of Agricultural Economists, vol. 41(2), pages 135-149, March.
    3. repec:eee:resene:v:51:y:2018:i:c:p:67-83 is not listed on IDEAS
    4. Nathan Eric Hampton, 1990. "COSTS OF CALIFORNIA's CORRELATIVE RIGHTS DOCTRINE AS A SOLUTION TO GROUNDWATER OVERDRAFT," Contemporary Economic Policy, Western Economic Association International, vol. 8(4), pages 106-117, October.
    5. Steven M. Smith, 2017. "Economic Incentives and Conservation: Crowding-in Social Norms in a Groundwater Commons," Working Papers 2017-08, Colorado School of Mines, Division of Economics and Business.
    6. Glenn D. Schaible & C. S. Kim & Marcel P. Aillery, 2010. "Dynamic Adjustment of Irrigation Technology/Water Management in Western U.S. Agriculture: Toward a Sustainable Future," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(s1), pages 433-461, December.
    7. Biswa Das & David Willis & Ken Rainwater, 2013. "An interdisciplinary regional groundwater model: A study of the Ogallala in the Texas High Plains," Regional Science Policy & Practice, Wiley Blackwell, vol. 5(1), pages 113-133, March.
    8. Dionisios Latinopoulos & Eftichios S. Sartzetakis, 2015. "Using Tradable Water Permits in Irrigated Agriculture," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(3), pages 349-370, March.
    9. 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.
    10. Siwa Msangi & Richard E. Howitt, 2007. "Income distributional effects of using market-based instruments for managing common property resources," Agricultural Economics, International Association of Agricultural Economists, vol. 37(s1), pages 249-259, December.
    11. Collehon, Noel R. & Supalla, Raymond J., 1988. "Intertemporal Farm Response to Limited Groundwater Conditions," 1988 Annual Meeting, August 1-3, Knoxville, Tennessee 270338, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Provencher, Bill, 1992. "A Private Property Rights Regime to Replenish a Groundwater Aquifer," Staff Papers 200553, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    13. Roumasset, James & Wada, Christopher A., 2013. "A dynamic approach to PES pricing and finance for interlinked ecosystem services: Watershed conservation and groundwater management," Ecological Economics, Elsevier, vol. 87(C), pages 24-33.
    14. 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, Boston, Massachusetts 236116, Agricultural and Applied Economics Association.
    15. 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.
    16. Kimberly Burnett & James Roumasset & Christopher Wada, 2014. "Cost Optimal Joint Management of Interdependent Resources: Groundwater vs. Kiawe (Prosopis pallida)," Working Papers 2014-6, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    17. Manning, Dale T. & Suter, Jordan, 2016. "Well Capacity and the Gains from Coordination in a Spatially Explicit Aquifer," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236206, Agricultural and Applied Economics Association.
    18. Gao, Yang & Williams, Ryan Blake & Mitchell, Donna M., 2016. "Cap and trade markets for groundwater: Efficiency and distributional effects of the permit allocation mechanism," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230015, Southern Agricultural Economics Association.

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