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How Institutional Structure Shapes Groundwater Market Implementation: Evidence from the Oxnard Basin

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  • Yin, Jiaxin

Abstract

This paper examines how institutional structure shapes groundwater market participation using the evidence from the Oxnard Basin in Ventura County, California, where the first groundwater market under California’s SGMA was implemented. Using a farm-year panel of well-level extraction records linked to crop and land-use data, I show that agricultural production units have become increasingly concentrated. The internal reallocation of groundwater within the production units absorbs some marginal gains from formal market participation. The findings suggest that limited groundwater market trading may reflect institutional substitution rather than market failure, with implications for the design and evaluation of environmental markets.

Suggested Citation

  • Yin, Jiaxin, 2026. "How Institutional Structure Shapes Groundwater Market Implementation: Evidence from the Oxnard Basin," 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri 404733, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea26:404733
    DOI: 10.22004/ag.econ.404733
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    References listed on IDEAS

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    1. Newell, Richard G & Stavins, Robert N, 2003. "Cost Heterogeneity and the Potential Savings from Market-Based Policies," Journal of Regulatory Economics, Springer, vol. 23(1), pages 43-59, January.
    2. Kaffine Daniel T & Costello Christopher, 2011. "Unitization of Spatially Connected Renewable Resources," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-31, March.
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