Files
Abstract
The development of groundwater-irrigated production technologies, fed by water from
the Ogallala Aquifer, facilitated the development of agriculture in the High Plains region
of the United States that began during the 1960s. The current rate of pumping for irrigation
in the region is causing the aquifer to be depleted in many areas, which is cause
for concern from a socioeconomic and environmental standpoint. The goal of this paper
is to assess the factors that affect the decision to adopt groundwater-irrigated production
by farmers, in the presence of risk differentiated by heterogeneous farmland quality and
groundwater depth. A binary choice model of adoption is estimated for Nebraska, from
1960 – 2005. The results suggest that farmers consider climate variability, revenue potential,
and potential pumping costs in the investment decision.