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Does Agriculture Generate Local Economic Spillovers? Short-run and Long-run Evidence from the Ogallala Aquifer

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  • Richard Hornbeck
  • Pinar Keskin

Abstract

Agricultural development may support broader economic development, though agricultural expansion may also crowd-out local non-agricultural activity. On the United States Plains, areas over the Ogallala aquifer experienced windfall agricultural gains when post-WWII technologies increased farmers' access to groundwater. Comparing counties over the Ogallala with nearby similar counties, local non-agricultural sectors experienced only short-run benefits. Despite substantial persistent agricultural gains, there was no long-run expansion of local non-agricultural sectors and there are some indications of crowd-out. With the benefit of long-run historical perspective, supporting local agricultural production does not appear to generate local economic spillovers that might justify its distortionary impacts.

Suggested Citation

  • Richard Hornbeck & Pinar Keskin, 2012. "Does Agriculture Generate Local Economic Spillovers? Short-run and Long-run Evidence from the Ogallala Aquifer," NBER Working Papers 18416, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18416
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Paula Bustos & Bruno Caprettini & Jacopo Ponticelli, 2016. "Agricultural Productivity and Structural Transformation: Evidence from Brazil," American Economic Review, American Economic Association, vol. 106(6), pages 1320-1365, June.
    2. Ram Fishman & Meha Jain & Avinash Kishore, 2013. "Patterns of Migration, Water Scarcity and Caste in Rural Northern Gujarat," Working Papers id:5400, eSocialSciences.
    3. Alain de JANVRY & Elisabeth SADOULET & Manzoor DAR & Kyle EMERICK, 2016. "The Agricultural Technology Adoption Puzzle: What Can We Learn From Field Experiments?," Working Papers P178, FERDI.
    4. Severnini, Edson R., 2014. "The Power of Hydroelectric Dams: Agglomeration Spillovers," IZA Discussion Papers 8082, Institute for the Study of Labor (IZA).
    5. Ryan Edwards, 2015. "Is plantation agriculture good for the poor? Evidence from Indonesia's palm oil expansion," Departmental Working Papers 2015-12, The Australian National University, Arndt-Corden Department of Economics.
    6. Lewis, Joshua & Severnini, Edson R., 2017. "Short- and Long-Run Impacts of Rural Electrification: Evidence from the Historical Rollout of the U.S. Power Grid," IZA Discussion Papers 11243, Institute for the Study of Labor (IZA).
    7. Bollman, Ray & Ferguson, Shon, 2016. "The Local Impacts of Agricultural Subsidies: Evidence from the Canadian Prairies," Working Paper Series 1129, Research Institute of Industrial Economics.
    8. Arthur Grimes & Sean Hyland, 2013. "Passing the Buck: Impacts of Commodity Price Shocks on Local Outcomes," Working Papers 13_10, Motu Economic and Public Policy Research.
    9. Samuel Marden, 2016. "The agricultural roots of industrial development: ‘forward linkages’ in reform era China," Working Paper Series 09116, Department of Economics, University of Sussex.
    10. Martin Fiszbein, 2017. "Agricultural Diversity, Structural Change and Long-run Development: Evidence from the U.S," NBER Working Papers 23183, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • N52 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: 1913-
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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