Production Externalities and the Gains from Management in a Spatially-Explicit Aquifer

Groundwater is a valuable input to agricultural production in many areas, but its use imposes external costs on nearby producers. Little attention has been given to externalities that directly affect groundwater productivity. We develop a dynamic, spatially-explicit model of groundwater use that allows changes in saturated thickness to affect both the pumping cost and productivity of nearby wells.We compare gains from coordinated, socially optimal groundwater use to those that result from a user pursuing unilateral optimization. For wells with average saturated thickness, both unilateral and coordinated optimization can moderately increase the net present value of resource rents.


Issue Date:
2019-01
Publication Type:
Journal Article
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/281320
ISSN:
1068-5502
Language:
English
Published in:
Journal of Agricultural and Resource Economics, 44, 1
Page range:
194-211




 Record created 2019-01-17, last modified 2020-10-28

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)