IDEAS home Printed from https://ideas.repec.org/a/wly/ajagec/v105y2023i3p861-887.html
   My bibliography  Save this article

Can cash incentives modify groundwater pumping behaviors? Evidence from an experiment in Punjab

Author

Listed:
  • Archisman Mitra
  • Soumya Balasubramanya
  • Roy Brouwer

Abstract

As groundwater levels steadily decline in India, authorities are concerned about reducing extraction for irrigation purposes without jeopardizing food security. Very low or zero prices for electricity and water in agriculture is partly responsible for overextraction, but charging higher prices is politically not feasible. In this study, we describe the results of a pilot scheme implemented in Punjab, India, where farmers who enrolled were allocated a monthly entitlement of electricity units and compensated for unused electricity. Eight hours of uninterrupted daytime electricity supply were also provided under the scheme instead of the usual mix of daytime and night‐time supply. Analyzing data from a cross‐sectional farm household survey and instrumenting for enrollment, we find that self‐reported hours of irrigation for enrolled farmers were significantly lower than for non‐enrolled ones, with no impact on rice yields. We also find a reduction in monthly electricity consumption at electricity‐feeder level due to the pilot scheme using the synthetic control method. Our results suggest that the combination of daytime electricity provision and cash incentives for unused electricity has the potential to incentivize farmers to reduce electricity consumption and irrigation hours by at least 7.5% and up to 30% without impacting paddy yields.

Suggested Citation

  • Archisman Mitra & Soumya Balasubramanya & Roy Brouwer, 2023. "Can cash incentives modify groundwater pumping behaviors? Evidence from an experiment in Punjab," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 861-887, May.
    • Handle: RePEc:wly:ajagec:v:105:y:2023:i:3:p:861-887
    DOI: 10.1111/ajae.12340
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ajae.12340
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ajae.12340?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    2. Lewbel, Arthur, 2018. "Identification and estimation using heteroscedasticity without instruments: The binary endogenous regressor case," Economics Letters, Elsevier, vol. 165(C), pages 10-12.
    3. Dube, Arindrajit & Zipperer, Ben, 2015. "Pooling Multiple Case Studies Using Synthetic Controls: An Application to Minimum Wage Policies," IZA Discussion Papers 8944, Institute of Labor Economics (IZA).
    4. Pfeiffer, Lisa & Lin, C.-Y. Cynthia, 2012. "Groundwater pumping and spatial externalities in agriculture," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 16-30.
    5. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    6. Sayre, Susan Stratton & Taraz, Vis, 2019. "Groundwater depletion in India: Social losses from costly well deepening," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 85-100.
    7. Arthur Lewbel, 2012. "Using Heteroscedasticity to Identify and Estimate Mismeasured and Endogenous Regressor Models," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(1), pages 67-80.
    8. Singh, Karam, 2009. "Act to Save Groundwater in Punjab: Its Impact on Water Table, Electricity Subsidy and Environment," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 22(Conferenc).
    9. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2015. "Comparative Politics and the Synthetic Control Method," American Journal of Political Science, John Wiley & Sons, vol. 59(2), pages 495-510, February.
    10. Sarkar, Anindita, 2020. "Groundwater irrigation and farm power policies in Punjab and West Bengal: Challenges and opportunities," Energy Policy, Elsevier, vol. 140(C).
    11. Sebastian Galiani & Brian Quistorff, 2017. "The synth runner package: Utilities to automate synthetic control estimation using synth," Stata Journal, StataCorp LLC, vol. 17(4), pages 834-849, December.
    12. Amarasinghe, Upali A. & Smakhtin, Vladimir & Sharma, Bharat R. & Eriyagama, Nishadi, 2010. "ailout with white revolution or sink deeper?: groundwater depletion and impacts in the Moga District of Punjab, India," IWMI Research Reports H043447, International Water Management Institute.
    13. Amarasinghe, Upali A. & Smakhtin, Vladimir U. & Sharma, Bharat R. & Eriyagama, Nishadi, 2010. "Bailout with white revolution or sink deeper?: groundwater depletion and impacts in the Moga District of Punjab, India," IWMI Research Reports 108672, International Water Management Institute.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kumar, Suresh & Madhu, M & Singh, Ranjay K & Kaushal, Rajesh & Jyotiprava Dash, Ch. & Gowda, Hombe H.C. & Barla, GW, 2024. "Changes in the value of ecosystem services due to watershed development in India’s Eastern Ghats and incentives for better stewardship," Ecosystem Services, Elsevier, vol. 65(C).
    2. Kishore, P. & Roy, D. & Birthal, P.S. & Srivastava, S.K., 2024. "Regulation, and Policy Response to Groundwater Preservation in India," Policy Papers 344994, ICAR National Institute of Agricultural Economics and Policy Research (NIAP).
    3. Kishore, Prabhat & Roy, Devesh & Birthal, Pratap S. & Srivastava, Shivendra Kumar, 2024. "Regulation and Policy Response to Groundwater Preservation in India," Policy Papers 345044, ICAR National Institute of Agricultural Economics and Policy Research (NIAP).
    4. D'Odorico, Paolo & Dell'Angelo, Jampel & Cristina Rulli, Maria, 2024. "Appropriation pathways of water grabbing," World Development, Elsevier, vol. 181(C).
    5. repec:ags:iamopb:344994 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David Gilchrist & Thomas Emery & Nuno Garoupa & Rok Spruk, 2023. "Synthetic Control Method: A tool for comparative case studies in economic history," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 409-445, April.
    2. Kishore, Prabhat & Singh, Dharm Raj & Srivastava, Shivendra & Kumar, Pramod & Jha, Girish Kumar, 2021. "Impact of Subsoil Water Preservation Act, 2009 on Burgeoning Trend of Groundwater Depletion in Punjab, India," 2021 Conference, August 17-31, 2021, Virtual 315198, International Association of Agricultural Economists.
    3. Mitra, Archisman & Balasubramanya, Soumya & Bouwer, Roy, 2021. "Can electricity rebates modify groundwater pumping behaviours? Evidence from a pilot study in Punjab, India," 2021 Annual Meeting, August 1-3, Austin, Texas 313871, Agricultural and Applied Economics Association.
    4. Bruno Ferman & Cristine Pinto & Vitor Possebom, 2020. "Cherry Picking with Synthetic Controls," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 510-532, March.
    5. Maximiliano Marzetti & Rok Spruk, 2023. "Long-Term Economic Effects of Populist Legal Reforms: Evidence from Argentina," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(1), pages 60-95, March.
    6. repec:osf:osfxxx:s8ayp_v1 is not listed on IDEAS
    7. Andrii Melnychuk, 2024. "Synthetic Controls with spillover effects: A comparative study," Papers 2405.01645, arXiv.org.
    8. Avdic, Daniel & von Hinke, Stephanie, 2021. "Extending alcohol retailers’ opening hours: Evidence from Sweden," European Economic Review, Elsevier, vol. 138(C).
    9. Robbert Maseland & Rok Spruk, 2023. "The benefits of US statehood: an analysis of the growth effects of joining the USA," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 17(1), pages 49-89, January.
    10. Alexander S. Skorobogatov, 2021. "The effect of alcohol sales restrictions on alcohol poisoning mortality: Evidence from Russia," Health Economics, John Wiley & Sons, Ltd., vol. 30(6), pages 1417-1442, June.
    11. Tomasz Serwach, 2022. "The European Union and within-country income inequalities. The case of the New Member States," Working Papers hal-03548416, HAL.
    12. Christine Olivia Strong, 2023. "The impact of fiscal rules on government debt: evidence from the CFA zone," Empirical Economics, Springer, vol. 65(5), pages 2357-2391, November.
    13. Joe Maganga Zonda & Chang-Ching Lin & Ming-Jen Chang, 2024. "On the economic costs of political instabilities: a tale of sub-Saharan Africa," Empirical Economics, Springer, vol. 66(1), pages 137-173, January.
    14. Roy Cerqueti & Raffaella Coppier & Alessandro Girardi & Marco Ventura, 2022. "The sooner the better: lives saved by the lockdown during the COVID-19 outbreak. The case of Italy," The Econometrics Journal, Royal Economic Society, vol. 25(1), pages 46-70.
    15. Amos Z. B. Flomo & Elissaios Papyrakis & Natascha Wagner, 2023. "Evaluating the economic effects of the Ebola virus disease in Liberia: A synthetic control approach," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1478-1504, August.
    16. Isaksen, Elisabeth Thuestad, 2020. "Have international pollution protocols made a difference?," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    17. Nguyen Huy,Tung & Adjognon,Guigonan Serge & van Soest,Daan, 2023. "Combatting Forest Fires in the Drylands of Sub-Saharan Africa : Quasi-Experimental Evidence from Burkina Faso," Policy Research Working Paper Series 10336, The World Bank.
    18. Aleksandar Kešeljević & Rok Spruk, 2024. "Estimating the effects of Syrian civil war," Empirical Economics, Springer, vol. 66(2), pages 671-703, February.
    19. Juan S. Mora‐Sanguinetti & Rok Spruk, 2023. "Economic effects of recent experiences of federalism: Analysis of the regionalization process in Spain," Journal of Regional Science, Wiley Blackwell, vol. 63(1), pages 30-63, January.
    20. Jason Poulos & Shuxi Zeng, 2021. "RNN‐based counterfactual prediction, with an application to homestead policy and public schooling," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 70(4), pages 1124-1139, August.
    21. Harouna Sedgo, 2024. "Corruption and leadership in Africa: Evidence from Burkina Faso," EconomiX Working Papers 2024-16, University of Paris Nanterre, EconomiX.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:ajagec:v:105:y:2023:i:3:p:861-887. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1467-8276 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.