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

Published online by Cambridge University Press:  26 January 2015

Ya Ding  and
Jeffrey M. Peterson
Ya Ding
Affiliation:
School of Management and Economics, University of Electronic Science and Technology of China
Jeffrey M. Peterson
Affiliation:
Department of Agricultural Economics, Kansas State University, Manhattan, KS
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Abstract

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.

Keywords

cost-share programincentive paymentsOgallala aquiferdynamic optimizationgroundwater conservationQ30Q32Q38
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 44 , Issue 2 , May 2012 , pp. 223 - 234
Copyright
Copyright © Southern Agricultural Economics Association 2012

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