Conserving One Water Source at the Expense of Another: The Role of Surface Water Price in Adoption of Wells in a Conjunctive Use System |
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Authors: | Eric Schuck Gareth P. Green |
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Affiliation: | 1. Department of Agricultural and Resource Economics , Colorado State University , Fort Collins, CO, 80523, USA E-mail: eschuck@lamar.colostate.edu;2. Department of Economics and Finance , Seattle University , Seattle, WA, 98122, USA |
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Abstract: | One potential side-effect of irrigation water rate reform is groundwater substitution. As surface water prices rise, irrigators may find it cheaper to rely on on-farm wells than a regional irrigation district. The impact of surface water price on well adoption is examined in a conjunctive use system where both surface water and groundwater are used to meet irrigator demand. Results indicate that as the price of surface water approaches 62% of the marginal cost of pumping groundwater, irrigators are more likely to have on-farm pumping capabilities. This result suggests that proposed water rate reforms by the United States Bureau of Reclamation may result in irrigators substituting groundwater for surface water by adopting on-farm wells. |
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