Ph.D. (Doctor of Philosophy)
Department of Economics
My dissertation examines the eﬀectiveness of pumping fees in groundwater commons agricultural irrigation as a conservation tool in the presence of varying water scarcity levels and spatial interdependence among irrigators. The ﬁrst chapter provides a brief overview of three important areas of groundwater commons irrigation addressed in this dissertation. The second chapter’s objectives are two-fold. First, I review the common-pool resources literature relative to concerns of sustainable extraction and implementation of conservation policies focusing on pricing incentives in the management of groundwater commons where irrigators share the same underlying aquifer. Second, I introduce a theoretical model involving incorporating a non-constant marginal cost of water dependent on a Pigouvian tax anddepth to water as cost-metric water scarcity measure into a multi-crop agricultural production theoretical model. This model motivates the empirical investigation of how irrigators are impacted diﬀerently by implementation of a conservation fee designed as a constant per unit water withdrawal (pumping) tax, based on the varying levels of scarcity they are con- fronted with. The third chapter describes the data and the sources of the data used in the dissertation as well as the implementation of a pumping fee in San Luis Valley of Colorado, the study region. In the fourth chapter, I present and estimate an empirical model motivated by the theoretical model of Chapter 2. The empirical investigation reveals that irrigators are impacted diﬀerently by the pumping fee based on the varying levels of scarcity they are face with. The ﬁfth chapter builds on the analysis in the fourth chapter. Having established diﬀerential eﬀects of the pumping fee on irrigators based on scarcity levels, I proceed to investigate how this might aﬀect the distributional eﬃciency of this pricing policy. I categorize irrigators into two groups – low water-stress severity and high water-stress severity statuses – based on whether they have faced continuous scarcity for at least two successive irrigation or growing seasons. I interact this dummy variable with the pumping fee policy variable and conduct a panel quantile regression analysis. The result of this chapter shows that severely water-stressed irrigators with low pumping levels bear a disproportionate portion of the pumping tax burden, suggesting that a constant per unit pumping fee is regressive and may not be distributionally eﬃcient in addressing conservation in groundwater commons in the long run.
In the sixth chapter, I adopt a game theoretic approach, modelling possible interaction among irrigating units, to investigate the strategic responses of these irrigating units. Irrigating units may alter their irrigating habits in response to changes in irrigation choices and other farming input decisions by neighbors. I estimate Spatial Durbin Models, includinga Spatial Durbin fractional Probit model to explore whether spillover eﬀects exist among irrigating units in terms of water use intensity, acreage size choice and production (land) use intensity. I control for the pumping fee, surface water use, depth to water levels (scarcity), types and acres of crops cultivated, and other irrigating unit speciﬁc characteristics, including their spatially lagged counterparts. The results indicate that in determining the amount of water use intensity, acreage size choices, and production intensity, irrigating units consider the choices of neighbors, with the strength of spatial dependency being highest for production intensity. Additionally, there are signiﬁcant spillover (indirect) eﬀects from changes in key covariates that show inadequacy of estimating only direct eﬀects.
Ekpe, Godwin Kwabla, "Pumping Fees and Spillovers in The Groundwater Commons: An Evaluation of A Conservation Tool and Irrigator Competitive Behavior" (2021). Graduate Research Theses & Dissertations. 6997.
Northern Illinois University
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