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What Water are We Really Pumping? The Nature and Extent of Surface and Groundwater Substitutability in Australia and Implications for Water Management Policies

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  • Sarah Ann Wheeler
  • Alec Zuo
  • John Kandulu

Abstract

Little is known about the interdependence between surface and groundwater extractions and trade. Groundwater metered extraction was modelled at the bore level (n = 1,890) in the Goulburn‐Murray Irrigation District, Victoria, from 2007–08 to 2016–17 to understand its associations with hydrologic, location, climatic, and economic factors. Surface and groundwater extractions were found to be substitutes for each other, with groundwater extractions statistically significantly increasing when: (i) bores were closer to surface water watercourses, (ii) surface water allocations and rainfall were lower, and (iii) surface water temporary market prices and entitlement trade out‐of‐zone volumes were higher. Other key groundwater extraction influences included pumping costs and commodity prices.

Suggested Citation

  • Sarah Ann Wheeler & Alec Zuo & John Kandulu, 2021. "What Water are We Really Pumping? The Nature and Extent of Surface and Groundwater Substitutability in Australia and Implications for Water Management Policies," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(4), pages 1550-1570, December.
    • Handle: RePEc:wly:apecpp:v:43:y:2021:i:4:p:1550-1570
    DOI: 10.1002/aepp.13082
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    References listed on IDEAS

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