Date of this Version
Zhang, Q. (2019). "The Effects of Economic Factors and Groundwater Policies on the Timing of Well Drilling". Master Thesis. University of Nebraska-Lincoln.
Understanding the factors that affect farmers’ irrigation decisions is critical for a better groundwater management. This study addresses the question of how economic, agronomic, and policy variables affect the timing of irrigation adoption in Nebraska. The key contribution of this paper is to identify farmers’ strategic responses to a particular type of policy intervention, a moratorium on well drilling. Our results estimate how farmers respond when a moratorium is announced but not enforced yet, and when neighboring areas implement a moratorium, which we refer as pre-regulation effect and policy spillover effect, respectively. Results show that farmers are more likely to drill a new irrigation well at least one year before the moratorium is implemented due to concerns about future constraints on water use, and the probability increases by 62%. We also find strong evidence that as any of the neighboring NRDs enforces a moratorium, the probability of drilling a new well in a given NRD increased by 77%. Unsurprisingly, the probability of drilling a well significantly decreased by 21% after the moratorium is implemented.
Advisors: Karina Schoengold and Taro Mieno