Technology Adoption in the Presence of an Exhaustible Resource: The Case of Groundwater Extraction

Shah, Farhed A.; Zilberman, David; Chakravorty, Ujjayant

doi:10.2307/1243539

Cited by 52 publications

(26 citation statements)

References 5 publications

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“…Hence the need for more theoretical work to resolve an asymmetric groundwater pumping differential game, where the differences in land productivity are taken into account. 8. Notable exceptions are Burness and Brill (1992) and Shah et al (1995) who considered endogenous irrigation technology choice. 9.…”

Section: Resultsmentioning

confidence: 99%

Current Issues in the Economics of Groundwater Resource Management

Koundouri

2004

Journal of Economic Surveys

182

125

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Abstract. The issue of groundwater management remains a practical concern in many regions throughout the world, while water managers continue to grapple with the question of how to manage this resource. In this article, we attempt to bring the most advanced and appropriate tools to bear on the issue of resource allocation involving groundwater. Our objective is to demonstrate the state of the art in the literature on ways to think about this complex resource and to deal with the important economic issues emanating from its complexity. We present the conceptual framework within which economists examine the elements interacting in the management of groundwater resources, indicate why the role of the market is limited with respect to the price of this very complex resource, and point to the mechanisms that can pull competitive groundwater price and quality-graded quantity of groundwater in line with their equilibrium levels. In particular, we critically review economic models of groundwater use, examine the potential for groundwater management, discuss the difficulties encountered in the estimation of the relevant control variables of such models, and identify the advantages and limitations of the instruments devised for the efficient use (allocation) of this resource. Finally, we argue that devised regulatory schemes usually ignore the information and knowledge needed for their implementation, and we suggest a core of conditions necessary for successful groundwater management reforms.

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Section: Resultsmentioning

confidence: 99%

Current Issues in the Economics of Groundwater Resource Management

Koundouri

2004

Journal of Economic Surveys

182

125

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“…Specifically, the authors show that modern technology is more likely to be adopted on lower quality land, or in areas with deeper wells. Similarly, [18] examines irrigation technology adoption in an exhaustible resource framework and finds that individuals will not adopt modern technology on their highest quality land, but do adopt modern technology as water price increases. Another study of irrigation adoption by [5] confirms the relation between water price and the adoption of modern technology, in this case drip.…”

Section: Elements Of the Adoption/diffusion Processmentioning

confidence: 99%

“…The first of these is the saturated thickness of the aquifer in the current period. Saturated thickness is closely related to the cost of irrigation, which has been shown to affect the adoption choice [5,18]. It is expected that as the saturated thickness of the aquifer decreases, and the price of pumping water increases, that producers will switch to a more efficient irrigation system.…”

Section: Variables and Sourcesmentioning

confidence: 99%

A Spatial Analysis of Irrigation Technology

Wright¹,

Hudson²,

Mutuc³

2013

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The nature of spatial spillovers in the adoption of irrigation technology is examined in this paper. Adopting a new technology is a decision that is based on economic and individual-specific factors. One of these individual factors might be communication with other users. It makes sense to expect that contact between users and non-users would follow a spatial pattern, and if knowledge spillovers are important to the adoption decision then resource managers need to be aware of their existence. Using counties in the Texas High Plains as the study area, the adoption of center pivot technology is examined using both Ordinary Least Squares and spatial regression models to determine if knowledge spillovers exist. Ultimately, no evidence was found that adoption practices in a county affects its neighbors; however, geographic location does matter to who adopts and when.

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“…Irrigators have the incentive to only consider their own profit when deciding on the best water consumption and to ignore the effect of water withdrawal on the entire water stock. In this situation, the aquifer will be depleted faster than the economically efficient rate (Shah, Zilberman, and Chakravorty, 1995). Policy intervention is needed to solve or alleviate the common pool problem of groundwater use.…”

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confidence: 99%

Comparing the Cost-Effectiveness of Water Conservation Policies in a Depleting Aquifer: A Dynamic Analysis of the Kansas High Plains

Ding

Peterson

2012

J. Agric. Appl. Econ.

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This research analyzes two groundwater conservation policies in the Kansas High Plains located within the Ogallala aquifer: 1) cost-share assistance to increase irrigation efficiency; and 2) incentive payments to convert irrigated crop production to dryland crop production. To compare the cost-effectiveness of these two policies, a dynamic model simulated a representative irrigator's optimal technology choice, crop selection, and irrigation water use over time. The results suggest that the overall water-saving effectiveness can be improved when different policy tools are considered under different conditions. High prevailing crop prices greatly reduce irrigators' incentive to give up irrigation and therefore cause low enrollment and ineffectiveness of the incentive payment program. In areas with low aquifer-saturated thickness, the incentive payment program is more effective, whereas in areas with relatively higher water availability, the cost-share program could be a better choice.

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Technology Adoption in the Presence of an Exhaustible Resource: The Case of Groundwater Extraction

Cited by 52 publications

References 5 publications

Current Issues in the Economics of Groundwater Resource Management

Current Issues in the Economics of Groundwater Resource Management

A Spatial Analysis of Irrigation Technology

Comparing the Cost-Effectiveness of Water Conservation Policies in a Depleting Aquifer: A Dynamic Analysis of the Kansas High Plains

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