Farmer behavior under groundwater management scenarios: Implications for groundwater conservation in the Mississippi Alluvial Plain

Water Economics and Policy
By: , and 

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Abstract

Concern about sustained availability of fresh groundwater for agricultural use in the Mississippi Alluvial Plain (MAP) mounts as groundwater levels decline. We evaluate elasticities of demand for groundwater and other agricultural inputs, as well as overall and output specific economies of scale for four major irrigated commodities (rice, corn, soybeans, and cotton) in the MAP region. Additionally, we investigate impacts of two groundwater management policy scenarios, including increasing pumping cost and groundwater use restrictions, on irrigation behavior. The results show price elasticity of demand for groundwater to be -0.13, indicating that it is inelastic, and an increasing cost of pumping will not significantly decrease relative demand for groundwater in the region. Even with policy scenarios that either increase the costs of pumping significantly or restrict groundwater use in the region, groundwater demand still appears to be inelastic. We also document significant overall economies of scale in the region. Our findings have implications for potential policy options aimed at reducing groundwater use. Efficient management practices are important to increase aquifer recharge, and at the same time, incorporation of human behavior via economic analysis will improve projections of groundwater availability in the MAP region.

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Additional publication details

Publication type Article
Publication Subtype Journal Article
Title Farmer behavior under groundwater management scenarios: Implications for groundwater conservation in the Mississippi Alluvial Plain
Series title Water Economics and Policy
DOI 10.1142/S2382624X20500095
Volume 6
Issue 4
Year Published 2020
Language English
Publisher World Scientific Publications
Contributing office(s) Science and Decisions Center
Country United States
State Missouri, Tennessee, Arkansas, Louisiana, Mississippi
Other Geospatial Mississippi Alluvial Plain
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