Water Market Participation and Agricultural Land Values

Policies that improve drought resilience have heterogeneous effects on agricultural land values. We examine the value of surface water transfers and groundwater resources in a hedonic analysis of agricultural parcels in California. We find that parcels in irrigation districts, which engage in interb...

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Bibliographic Details
Published in:Land economics 2024-02, Vol.100 (1), p.127-147
Main Authors: Chaudhry, Anita M, Fairbanks, Dean H. K, Nolte, Christoph
Format: Article
Language:English
Subjects:
Agricultural land
Districts
Drought
Groundwater
Irrigation
Irrigation districts
Land appraisals
Natural disasters
Policies
Property values
Resilience
Surface water
Surface-groundwater relations
Water
Water resources
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Summary:Policies that improve drought resilience have heterogeneous effects on agricultural land values. We examine the value of surface water transfers and groundwater resources in a hedonic analysis of agricultural parcels in California. We find that parcels in irrigation districts, which engage in interbasin surface water transfers, experience an increase in value in subsequent years, but the gains are short-lived and unevenly distributed. Value of groundwater stock is higher in parcels outside irrigation districts. We also find that policies to restrict groundwater-substitution-based transfers, which aimed to reduce groundwater open-access externalities, have not been a deterrent against transfers in all areas.
ISSN:0023-7639
1543-8325
DOI:10.3368/le.100.1.102122-0091R