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Economic Efficiency of Short-Term Versus Long-Term Water Rights Buyouts

Published online by Cambridge University Press:  26 January 2015

Erin Wheeler ,
Bill Golden ,
Jeffrey Johnson  and
Jeffrey Peterson
Erin Wheeler
Affiliation:
Department of Agricultural and Applied Economics, Texas Tech University, Lubbock, TX
Bill Golden
Affiliation:
Department of Agricultural Economics, Kansas State University, Manhattan, KS
Jeffrey Johnson
Affiliation:
Department of Agricultural and Applied Economics, Texas Tech University, Lubbock, TX
Jeffrey Peterson
Affiliation:
Kansas State University, Manhattan, KS
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Abstract

Because of the decline of the Ogallala Aquifer, water districts, regional water managers, and state water officers are becoming increasingly interested in conservation policies. This study evaluates both short-term and long-term water rights buyout policies. This research develops dynamic production functions for the major crops in the Texas Panhandle. The production functions are incorporated into optimal temporal allocation models that project annual producer behavior, crop choices, water use, and aquifer declines over 60 years. Results suggest that long-term buyouts may be more economically efficient than short-term buyouts.

Keywords

dynamic production functionnonlinear optimizationOgallala Aquiferwater rights buyoutQ30Q32Q38
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 40 , Issue 2 , August 2008 , pp. 493 - 501
Copyright
Copyright © Southern Agricultural Economics Association 2008

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