ater an gement: tribution I UNIVERSITY OF Empirical estimates of benefits from groundwater management are reported for an ar a in) California with heavy reliance on groundwater supplies. Benefits are quite sensitive t hi the water demand schedule and interest rate but less sensitive to other parameters. I However, in all cases considered the increases in welfare from groundwater managlentAg ' ricuitura I rc n n o riirs Lib''' rv are less than ten percent. Tax revenues received under a system of pump taxes are foil? to five times as large as the benefits from management. Thus, groundwater users gain under a system of quotas but may suffer substantial welfare losses under pump taxes.

Economic analyses of irrigated agriculture stress that yield levels which maximize profits can be attained with less water than maximum yields. A premise of such analyses is that irrigated soils have perfectly uniform rates of infiltration. A general method for evaluating the effects of nonuniform infiltration rates on optimal levels of water application is developed. Empirical analyses of the implications of non‐uniform infiltration rates on optimal levels of applied water, yields, and profits are reported for corn (Zea maysL.) and cotton (Gossypium hirsutumL.). The results are critically influenced by the nature of the water yield relationships postulated for these crops. For corn, where excessive water applications apparently have no effect on yield, nonuniform conditions reduce yield and profit. These outcomes can be offset by increasing water applications and optimal levels of applied water increase as the degree of uniformity declines. For cotton, nonuniformity leads to decreases in yields and profits that cannot be offset by increased water applications. This is attributable to the apparent sensitivity of cotton yields to excessive applications of water. For both crops, increases in the price of water provide little incentive to improve the uniformity of infiltration. The results demonstrate that conventional economic analyses which ignore infiltration uniformities, underestimate optimal levels of applied water, often substantially.

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The split application of nitrogen provides insurance against the risk that late spring application will be infeasible because of wet soil. Risk aversion and production uncertainty have little impact on total nitrogen available to the crop but do affect the split in application and the total nitrogen applied. A risk-averse farmer applies more (less) nitrogen prior to planting and total nitrogen than a risk-neutral farmer if nitrogen and water are substitutes (complements). For the case of substitutes, the nitrogen lost through leaching is the premium which the risk-averse farmer pays to insure a proper level of nitrogen.

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