Projects Funded for -

The Economics of Supply Chains with Application for Animal-free Meats: Impacts on the Economy and the Environment

David Zilberman, Joel Ferguson, and Lichun Huang


Specific Objectives of the Project:

  1. To expand a conceptual framework for a design of supply chains to include dynamic considerations and diffusion over space and time.
  2. To develop a conceptual framework to understand the alternative route that is employed by researchers to produce cultured meats.
  3. To develop a conceptual framework to assess the implications of different strategies on design of supply chains for production and distribution of the meat products and for procurement of feedstock.
  4. To assess the potential economic and environmental impact of alternative cultured meats on various sectors of agriculture, consumers, as well as the environment. This analysis will be conceptual.
  5. To consider how alternative policies may affect the evolution of the industry.
  6. To numerically provide orders of magnitude estimates of the impacts under alternative scenarios.

Project Report/Summary of Results:
Innovations in food science have led to the emergence of plant-based substitutes for animal meat products. Our analysis overviewed some of the emergent products and analyzed the economic conditions that lead to their growths. We argue that plant-based meat substitutes increase the input use efficiency of grains but the technology is in earlier stages and will benefit from learning by doing and upscaling. We expect that the use may be gradual and dependent upon the technological improvements and consumer preferences. These products have the potential to reduce greenhouse gases and the environmental side effects of agriculture. We developed basic formulas to assess the condition for their expansion and growth but further research is required to quantify their impacts.

Plant-based meat is only in its infancy. If consumers will accept it as a close substitute for meat, its seemingly lower input requirements, and GHG emissions contributions, it will change the structure of agribusiness, the economics of food and agriculture and rural regions. We argue that it will reduce the livestock sector significantly and reduce footprint and the environmental impacts agriculture. It will have a significant distribution effect reducing the wellbeing of animal agriculture. However, the changes will take time and we expect significant efforts to stop the technology. The use of biotechnology and creative culinary efforts may affect the quality and economic of plant-based meat.

Consumer Valuation of Aquaculture Attributes

Sofia Villas-Boas


Specific Objectives of the Project:
Gather data on consumer stated valuations for seafood and aquaculture attributes

Project Report/Summary of Results:
We have gathered a comprehensive data set on the geographic and time patterns of production of aquaculture in the United States and have started developing a survey instrument to producers and also an additional survey instrument to consumers in the production areas, as well as a representative sample of US consumers . We do not have a draft available yet of your data analysis and plan to have one in a year.

The Impacts of a Declining Farm Labor Supply on Farming in California

J. Edward Taylor, Diane Charlton, and Stavros Vougioukas


Specific Objectives of the Project: Objective

  1. To analyze how labor shortages are affecting the use of the H-2A visa program and farm labor contractors in California.
  2. To analyze how higher labor costs are affecting the crop mix, the use of labor-saving technologies, and cultivation practices in California.
  3. To analyze the extent to which reductions in the farm labor supply are affecting the production of fruit and vegetable crops in California.

Project Report/Summary of Results:
The funds provided through this grant enabled us to continue processing and analyzing the data we collected from a 2019 survey that we conducted in collaboration with the California Farm Bureau Federation. Additional analysis of these data revealed that farmers have found it increasingly difficult to gain access to an adequate supply of farm workers between 2014 and 2018. Fifty-eight percent of the 1000+ farmers we surveyed reported that they were unable to hire enough workers at some point between 2014 and 2018, and a higher share of those reporting labor shortages between that time span said that they experienced shortages in 2017 and 2018. In response to labor-availability problems, farmers reported making a variety of changes to their usual production practices. First of all, the vast majority of farmers reported having to raise wages to attract and retain workers. Between 2014 and 2018, the share of farmers reporting that they had to raise wages to attract workers increased from 31% to 79%. Second, farmers report becoming increasingly reliant upon farm labor contractors (FLC) and the H-2A visa program. The most common reason for using an FLC was to make sure they had enough workers, while about a quarter
of respondents indicated that they used them to reduce the administrative burden associated with hiring farm workers. About 5% of farmers indicated that they had switched acreage out of labor-intensive fruit and vegetable crop production into mechanically-harvested crops. Of those who indicated that they had switched some acreage out of labor-intensive crop production into non-labor-intensive crops, the majority switched into the production of tree nuts, revealing evidence that is consistent with some media reports. About one-third of the farmers indicated that they had to change one (or more) of their usual cultivation practices at some point between 2014 and 2018 either because there were not enough workers available or because of rising labor costs. The percentage of farmers who reported having to change cultivation practices increased by 18 percentage points between 2014 and 2018. Roughly twenty percent of the farmers indicated that they had started using a labor-saving technology for the first time between 2014 and 2018. The most common types of labor-saving technologies were mechanical harvesters for wine grapes and specialized tractor attachments. The main reason for adopting these technologies was rising labor costs; although, over half of those who adopted a labor-saving technology for the first time also said that farm worker availability played a role in the decision, too.

Additional research that was conducted under this grant included ongoing work with cooperating personnel member Diane Charlton, which led to a (forthcoming) publication in the journal Agricultural Economics (see publication section below). This work uses panel data from a nationally-representative survey of rural households in Mexico and finds that educational attainment among rural Mexicans, which has been stimulated by investments by the Mexican government, has led to a decline in the supply of farm workers. This decline in the supply of farm workers is driven by higher returns in non-farm sectors of the economy due to the acquisition of valuable human capital, which has opened up opportunities to engage in non-farm employment for rural Mexicans.

The Political Economy of Implementing California’s Sustainable Groundwater Management Act (SGMA)

Ellen M. Bruno, Arthur Wardle, Richard Sexton, and Paige Griggs


Specific Objectives of the Project:
(a) Construct a database on how the 298 agencies registered at present to manage basins under SGMA are (i) structured legally, (ii) governed, and (iii) planning to implement the SGMA mandates; (b) Study differences in (iii) as a function of (i) and (ii) and other characteristics of the underlying groundwater resources, availability of surface water, agricultural products being produced, demographics, and urban/rural interfaces; and (c) Provide guidance to groundwater agencies, California Department of Water Resources (DWR), and other policy makers regarding SGMA implementation based on results adduced from (a) and (b).

Project Report/Summary of Results:
Regions of California will be facing significant reductions in water use in the coming years. This project provides an update on the progress made thus far towards implementing the Sustainable Groundwater Management Act (SGMA). For all high- and medium-priority basins, we record and discuss the composition of newly formed groundwater agencies and their proposed management actions by coding agency board seats by entity type and groundwater management activities by strategy type. We find that the majority of board seats are held by quasi-public water entities like irrigation districts and local agencies, skewing representation towards existing agricultural interests. The 92 unique GSAs participating in California’s high- and medium-priority basins grouped to form 43 Groundwater Sustainability Plans (GSPs) containing management actions that can be categorized into either supply augmentation or demand management. Of the 27 GSPs imposing demand management through groundwater allocations, 19 plans are also considering creating a market to trade those allocations. Basins not allowing trade are concentrated on the west side of the Central Valley. These actions may have large implications for the economic costs of SGMA.

The Impacts of Extreme Temperatures and Drought on Mental Health and Suicide in California's Agricultural Community

Kurt Schwabe and Maithili Ramachandran


Specific Objectives of the Project:
Using panel data at the individual and county levels, we propose to investigate the causal impact of extreme temperature events and drought on mental health in California with particular attention to agricultural communities. More specifically, we will:
● use spatially-explicit health data (~245,000 respondents over 18 years of age) from multiple waves of the California Health Interview Survey (CHIS) between 2005 and 2015 to assess the impact of extreme temperatures and drought on psychological distress in agricultural communities
● combine county-level time series on temperature, drought, and suicide rates over the period, 1999–2013 to determine if suicide rates respond to extreme temperatures and drought, and if this response varies between metropolitan and rural counties.

Summary of Results:
The main contribution of the project is in highlighting the relationship between heat waves and adult psychological distress. Previous research in this area, i.e., investigating the role ambient temperature plays in influencing mental health, has considered the impact of rising temperatures on hospitalizations for mental illnesses or suicides, yet there is a lack of attention to how warming affects mental health on a more basic level. In psychiatric research and practice, psychological distress is recognized as a precursor to exhaustion (Arvidsdotter et al. 2016). Furthermore, the majority of analyses in this area focus on non-consecutive instances of extreme heat and extreme cold, rather than heat waves, or cold waves. As sustained extreme weather events, heat waves draw down physiological and economic resources at a greater rate, leaving greater psychological distress in their wake. Consequently, the primary contribution of our study is in showing the type and aspect of heat waves that exerts the most adverse impact on psychological distress. To wit, we find that nighttime heat waves compound psychological distress while daytime heat waves do not. Furthermore, as the number of days in a heat wave increases, the greater the impacts on psychological distress.

A second contribution of the study is to show that non-wave extreme heat events do not compound psychological distress. This result is counter to the clear negative impact that extreme heat appears to have on other mental health outcomes such as emergency department visits or suicides (see for example, Mullins and White 2019 and Burke et al. 2018).

A third and methodological contribution of the study is its assessment of individual heat exposure at a finer geographical scales than seen in previous studies in the heat-health literature. By measuring temperature exposure at the respondent’s residential ZIP code area rather than their county, we ensure that intra-county differences in extreme temperature events are recognized.

From a policy perspective, one takeaway from our research is the possible welfare enhancing impact of a policy that reinforces messaging related to heat warnings and advisories with particular attention to local percentile thresholds. Such a policy is consistent with previous research, such as Guirguis et al.’s (2014) who found that in California, between 1999 and 2009, “there were 11 000 excess hospitalizations that were due to extreme heat over the period, yet the majority of impactful events were not accompanied by a heat advisory or warning from the National Weather Service. These results suggest that heat-warning criteria should consider local percentile thresholds to account for acclimation to local climatological conditions as well as the seasonal timing of a forecast heat wave.”

In terms of the mechanism at work here, we hypothesize the following. Heat exerts an adverse impact on mental health. Adult psychological distress is sensitive to sustained rather than scattered heat exposure, and to nighttime rather than daytime heat. A nighttime heat wave is particularly damaging to mental health. We believe that this may stem from the disruptive impact of nighttime heat waves on human sleep. Our hypothesis is consistent with Lohmus (2018) who, after reviewing experimental data on sleep and temperature, concludes that, “… a heatwave with greatly elevated night temperatures is probably more detrimental for sleep than high temperatures during daytime only.” Lohmus also observes that in people who are not acclimatized to warmer weather, “high nighttime temperatures are almost always deleterious to sleep quality.” Though more interdisciplinary research is often recommended, these preliminary pieces of evidence suggest that the mechanism by which (nighttime) heat affects adult mental health may travel through sleep patterns.

Negative / Incomplete Results. Unfortunately, due to the period over which the project was funded (and extended), challenges arose surrounding Covid-19 that limited the extent to which we could investigate all the objectives listed above. As illustrated in the results section above, while we were able to investigate the role of extreme temperature events on mental health (as measured by psychological distress), we were not able to (i) further disaggregate the analysis to fully investigate the relationship within agricultural communities nor (ii) perform a less granular and complete analysis of suicides and their relationship to extreme temperature events at the county level. Preliminary assessments were performed with lackluster results. That is, preliminary investigations of the relationship between psychological distress and extreme temperature events within agricultural communities did not show any strong relationship nor did preliminary analysis of suicide rates and drought when measured at the county level. The lack of statistically significant results does not suggest that such relationships do not exist, but rather indicate that with the data we had available and the specifications we were limited to, such relationships were not identified. We feel that both of these areas warrant further research.

An Optimal Tax Approach to Policy Problems in California Agriculture

James Sallee and Connor Jackson


Specific Objectives of the Project:
The aim of this project is to apply a particular set of economic tools to analyze policies aimed at mitigating externalities from agriculture, using data from California.

Project Report/Summary of Results:
The goal of this project is applying the tools of public finance to evaluate policies aimed at mitigating externalities from California agriculture. The research team studied several possible applications and settled on the use of digesters to mitigate methane emissions from dairies. The team assembled data on the cost and location of all digesters in the state and used those data to estimate mitigation costs per ton of emissions. These costs vary substantially due to economies of scale and agglomeration effects, because cost depends on the proximity of each dairy to existing natural gas infrastructure and other dairies.

Given this distribution of costs, we can characterize the efficiency and distributional consequences of different regulatory policies (e.g., digester mandates versus digester subsidies versus a renewable natural gas feed-in tariff versus a tax on emissions or dairy products). In addition, we have identified direct measures of methane emissions tied to individual dairies from remotely sensed data collected by NASA’s Jet Propulsion Laboratory that provide a check on our modeled mitigation potentials.

Best Management Practices to Mitigate Water Quality Impairments: What Are the Benefits and Costs?

Tina L. Saitone, David Lewis, and Kenneth W. Tate


Specific Objectives of the Project:
Nonpoint source pollution is the leading cause of water quality impairments in California. Many sources, including cattle grazing in or around streams, lakes, and wetlands, may contribute to the pollution of surface waters. Grazing best management practices (e.g., riparian fencing, off-stream water, etc.) have been shown to reduce fecal-based microbial pollutants and improve surface water quality. Objectives of this project are threefold: i) estimate the biophysical reductions in fecal indicator bacteria over time, ii) estimate the costs associated with grazing best management practices, and iii) compare these costs to biophysical results in the literature on efficacy to estimate benefit/cost of practice implementation.

Project Report/Summary of Results:
Coastal areas support multiple important resource uses including recreation, aquaculture, and agriculture. Unmanaged cattle access to stream corridors in grazed coastal watersheds can contaminate surface waters with fecal-derived microbial pollutants, posing risk to human health via activities such as swimming and shellfish consumption. Improved managerial control of cattle access to streams through implementation of grazing best management practices (BMPs) is a critical step in mitigating waterborne microbial pollution in grazed watersheds. This work reports trend analysis of a 19-year dataset to assess longterm microbial water quality responses resulting from a program to implement 40 grazing BMPs within the Olema Creek Watershed, a primary tributary to Tomales Bay, USA.

Stream corridor grazing BMPs implemented included: 1) Stream corridor fencing to eliminate/control cattle access, 2) hardened stream crossings for cattle movements across stream corridors, and 3) off stream drinking water systems for cattle. We found a statistically significant reduction in fecal coliform concentrations following the initial period of BMP implementation, with overall mean reductions exceeding 95% (1.28 log10)—consistent with 1—2 log10 (90 – 99%) reductions reported in other studies. Our results demonstrate the importance of prioritization of pollutant sources at the watershed scale to target BMP implementation for rapid water quality improvements and return on investment. Our findings support investments in grazing BMP implementation as an important component of policies and strategies to protect public health in grazed coastal watersheds. In total, this suite of practices cost over $870,000 to implement. The remaining work on this project (in progress) uses spatial and temporal variation in practice implementation to determine the benefits and costs associated at the practice level.

The Tradeoff Facing Agricultural Workers Between Wages and Health Care and other Benefits

Jeffrey Perloff, Kwabena Donkor, and Susan Gabbard


Specific Objectives of the Project:
We investigated the tradeoff facing hired, seasonal agricultural workers between wages and various benefits, particularly health care insurance.

Project Report/Summary of Results:
The Affordable Care Act (ACA) made health insurance more available to low-wage people, such as documented hired-seasonal-agricultural workers. Were workers who gained government health insurance more likely to take jobs that offered high wages and few benefits rather than jobs with lower wages that offered more benefits? Based on data from the National Agricultural Worker Survey from 2010 through 2016, the on-the-job benefits of these workers did not change significantly after the ACA went into effect. Incentive benefits, season-ending benefits, and holiday benefits did not change at all. Agricultural jobs provided health insurance at the same rate as prior to ACA. However, documented workers, particularly those with pre-existing medical conditions, were much 11.4% more likely to have government health insurance and 5.6% less likely to rely on employer insurance.

Unpacking Residential Water Consumption and the Impacts of Nudges: A Machine Learning Application

Mehdi Nemati


Specific Objectives of the Project:
1. Disaggregate residential water consumption to indoor and outdoor usage using machine learning methods.
2. Estimate effect of HWURs on indoor and outdoor water consumption (obtained in the first objective).
3. Estimate the impact of HWURs on peak hour and day water consumption.
Analysis of the data revealed that we could not analyze objectives two and three using hourly data (the hourly data started around the same time the HWURs program launched). Instead, we use daily data to perform the analysis for objectives 2 and 3. Additional analysis is done to identify rebound effects and it is heterogeneity after the CA water mandate in 2015.

Project Report/Summary of Results:
Increased frequency and severity of droughts and rapidly growing populations increase the stress on water resources in many arid and semi-arid regions worldwide, such as the Western United States. In response to these evolving realities and their associated challenges, water providers often use demand-side management via conservation and efficiency to buffer against short-term water supply shortfalls. The implementation of a smart water metering system in the medium-size water utility in Northern California in 2014 allowed the water utility to record the hourly water consumption of all its customers. This data availability has enabled a large-scale research project to proceed with the aim to disaggregate residential daily water consumption to indoor (e.g., shower, washing machine, etc.) and outdoor (e.g., irrigation) components. Such information can guide the development of alternative tariff structures and other demand management initiatives to reduce peak demand which is a critical parameter for water infrastructure planning and design. We also contribute to the literature on social and economic patterns of water use rebound after the 2015-2016 CA water mandate.

We use hourly residential water consumption data (more than 500 million data points) between 2015-2019 medium-size water utility in Northern California to identify the peak/off-peak use hours and gain insights into how it changed once mandatory restrictions were lifted in June 2016.

Our results illustrate the peak use hours are between 1-5 am, but its distribution changed dramatically after the drought in 2017-2019. There was a shift in the peak hour of consumption from morning (6 am) to the early mornings (4-5 am). Water use distribution became narrower, with decreases in standard deviations while increases in means. Our results also indicate that the water use rebound from the mandate period was 2.8 gallons/hour, which equals 31% of average hourly water use during the mandate period (8.97 gallons/hour). The rebound varies considerably by the hour, season, and consumption, and income levels. This was the highest level of consumption of a day. The highest rebound at 5 am was 11.53 gallons/hour, followed by a rebound at 4 am of 11.40 gallons/hour. The rebounds were noticeably flat during 4 pm-1 am, with a range of 1.08-3.23 gallons/hour. Interestingly, we found that the rebounds were negative during 8 am-2 pm, with the largest rebound of -0.88 gallons/hour. The results showed that the rebound in summer was four times higher than that in Winter. Rebound in quintile five of consumption level was 6.34 gallons/hour while the rebound in quintile one was ten times lower than that.

The second part of our analysis is based on daily data from the same agency. This part estimates how web-based Home Water Use Reports (HWURs) affect household-level water consumption in a medium-size water utility in Northern California. The HWURs under the study share social comparisons, consumption analytics, and conservation information to residential accounts, primarily through digital communications. The data utilized in this part is a daily panel dataset that tracks single-family residential households from January-2013 to September-2019. We found that there is a 6.2% reduction in average daily household water consumption for a typical household who enrolled in the program. We estimate heterogeneous treatment effects by the day of the week, the content of push notifications, and baseline consumption quintile. For the latter, we provide an illustrative test to emphasize how mean reversion can severely bias a naïve panel data estimator for heterogeneous treatment effects when the source of heterogeneity is the outcome variable (e.g., consumption or expenditures). We find evidence that leak alerts are effective in reducing consumption immediately following the alert.

Farmworkers and Nonfarm Work: How Many Are Leaving and Why

Pierre Mérel and Zachariah Rutledge


Specific Objectives of the Project:
The objectives of this research are to (1) quantify past adaptation to climate change in United States field crop production, (2) estimate the long-run consequences of climate change on this type of agriculture, and (3) assess the potential of one specific adaptation, double-cropping, to attenuate the potential losses resulting from climate change.

Project Report/Summary of Results:
We have developed a theoretical framework whereby agricultural production is related to both contemporaneous weather and long-run climate through simple quadratic functions. The framework implies a long-run response function to climate that is the outer envelope of short-run responses to weather conditional on climate. Applying this framework to a 66-year panel of yields and weather, we simultaneously estimate short- and long-run responses to climate for the United States (US) corn sector. We find evidence of significant climatic adaptation. In the case of temperature exposure (captured through growing degree days), traditional “myopic” panel methods that do not explicitly model climate adaptation nonetheless deliver estimates similar to those of our estimated long-run response. We formally show that this is due to the large cross-sectional variation in climate temperature relative to locational weather fluctuations. In contrast, for precipitation, which exhibits larger year-to-year variation relative to cross-sectional variation, models that do not account for climatic adaptation deliver estimates that are biased, but can be viewed as an average of the long- and short-run responses.

In complementary work, we focus on one specific adaptive action: double cropping. Although prior agronomic research suggests that climate change may expand the area suitable for double cropping in the US, there is relatively little empirical evidence of the relationship between climate and farmers’ decisions to double crop. We link high-resolution land cover data with detailed soil and climate data to explain farmers' propensity to double-crop soybeans with winter wheat in the Eastern United States. We find small and slightly negative effects of warming on double-cropped acreage. A fixed-effects panel model of county yields further indicates that yields of double-cropped soybeans are about 9.9% lower than those of single-cropped soybeans. Accounting for both of these effects, we conclude that double cropping is unlikely to offset negative impacts of climate change on US crop production.

Guest Workers in California Agriculture

Philip Martin, Tom Hertz, and Daniel Carroll


Specific Objectives of the Project:
The average employment of hired workers in California agriculture was 425,000 in 2016, almost three times the 152,000 average employment in the state’s food manufacturing industry. Almost a million unique workers fill full-time equivalent jobs on California farms, a ratio of 2.2 workers per FTE job, and average employment is rising.

This project focuses on three issues of great importance to California agriculture. The first is immigration, which determines the supply of labor to California agriculture since 90 percent of the state’s farm workers were born abroad. The second is adjustments to fewer unauthorized newcomers, including the 4-S strategies, of satisfying current workers, stretching them with productivity enhancements, substituting machines for hand workers, and supplementing the current workforce with H-2A guest workers. The third issue analyzes the effects of state regulatory changes, including the minimum wage of $15 an hour and the requirement to pay overtime wages after eight hours a day or 40 a week in 2022.

The project supports several major activities, including research articles, shorter papers in ARE Update and the quarterly Rural Migration News as well as monthly blogs ( We host a major research and public conference each year that attracts over 120 participants; the conferences scheduled for March 19-20, 2020 was postponed due to the coronavirus. The results of the project are disseminated widely, including in the new edition of Giannini’s California Agriculture book and to the more than 1,000 subscribers of the Rural Migration newsletter and blogs. The project had numerous interactions with federal and state analysts, journalists, and others.

Project Report/Summary of Results:
Farm employment has been rising as more expensive land and water encourages a switch to high value fruits and vegetables. Average farm employment has been increasing by 10,000 a year, and the number of unique workers employed in agriculture has been expanding by 20,000 a year, so that in 2016 almost a million unique workers filled an average 425,000 farm jobs.

The hired workers on crop farms are aging (average 41 and approaching the average 42 of all US workers) and settling in one place with their families. Follow-the-crop migration has almost disappeared, and there are fewer unauthorized newcomers, making the current farm workforce less flexible. Farm employers are responding with 4-S strategies. Employers try to satisfy current workers to retain them longer and stretch them with mechanical aids that increase productivity by making farm work easier. The third strategy is substitution, replacing workers with machines, or switching crops, and the fourth is to supplement with H-2A guest workers, who have become the flexible newcomers to the farm workforce.

In the medium term, the two dominant strategies are substitution and supplement, a race between labor-saving technologies and guest worker admissions. Responses vary by commodity, and are influenced by policy decisions. For example, the raisin industry is likely to shrink faster as labor costs rise and some farmers mechanize while others switch to almonds. Strawberries are more likely to supplement with guest workers and use conveyor belts in the fields to stretch workers until there is a mechanization breakthrough. Imports are the wild card, and may play an increasing role in supplying some commodities to US consumers.

The project monitored the impacts of farm labor developments on the competitiveness of California agriculture, conducted research that was published in a variety of outlets, and made presentations to a dozen groups ranging from the National Council of Agricultural Employers to the Agricultural Personnel Management Association, plus talks in classes at UCD and elsewhere. In March-April 2020, the project generated several short papers on the coronavirus.

Land Subsidence--The Forgotten Enigma of Groundwater (Over) Extraction: Implications to California

Ariel Dinar


Specific Objectives of the Project:

  1. Catalogue the various locations of LS in California based on the severity of the land subsidence issues;
  2. Develop an analytical framework to evaluate the tradeoff between benefits from pumping groundwater for consumption in urban and irrigation activities and the social cost of doing so (including energy for pumping from deeper level, water quality degradation from intrusion of low-quality water, and damages from LS to infrastructure and from groundwater storage loss);
  3. Derive optimal rates of pumping of groundwater for combinations of aquifer geological formations and value of water in economic activities;
  4. Apply the analytical framework to several locations in California known to be affected by LS.

Project Report/Summary of Results:

Land subsidence (LS) is the settlement of the land surface triggered by human-induced and natural-driven processes, such as oxidation of organic soils, sub-surface water mining, or fluids extraction (oil, gas and groundwater). Land subsidence is a global problem, mostly studied and recognized, to different extents, in association with aquifer over-exploitation. LS occurrence around the world is most prominent in those aquifers composed of loose unconsolidated materials (e.g. sands, clays, silts, etc.) that are over pumped.

It is assessed that LS inflicts significant damages on local communities and on the environment.  As such, identifying the types of damages and quantifying them both in terms of the various physical impacts and their economic values, short- and long-term, would be an essential first step for preparing policies to address the problem.

Most studies on LS are indicative in the sense that they identify the driving process and measure the land subsidence amount and extent in a specific locality. Few are the works that assess the impacts of LS in terms of social, environmental and economic consequences.

In this project we developed two research directions (1) development of a regional model to explain the economics of optimal GW pumping in the presence of LS and (2) development of a quantitative method to assess the extent of LS and apply it to various aquifers.       

Our findings suggest that optimal GW pumping regimes in the presence of LS should be more conservative than when LS is minimal or not absence. Damages to infrastructure and loss of storage capacity inflict major social costs that affect the optimal pumping regime and should be part of a regional policy to sustain the regional resources.  The model was applied in three locations: Po Basin, Italy; Murcia, Spain; Chino Basin, California and demonstrated the value of preventive and responsive policies.

Findings from the second research direction, while still in progress, quantified, based on data from 119 locations globally, relationship between Extent of Land Subsidence and explanatory variables to suggest the impact of climatic, institutional, geological, and policy interventions on the extent of the impact of land subsidence damages measured by a vector of 10 damage aspects.

Impact of SGMA on Crop Mix in California

Bruce Babcock and Dat Tran


Specific Objectives of the Project:
Develop appropriate datasets and modeling framework to be used to estimate SGMA impacts.
Develop the modeling capability to simulate changes in crop mix in the San Joaquin Valley and to carry out the simulations.

Project Report/Summary of Results:
We developed a new approach for estimating supply elasticities for California tree crops. The purpose was to obtain reliable elasticities to populate PMP models of water basins in the San Joaquin Valley. Supply elasticities are estimated by regressing observed lagged acreage changes on estimated demand shifts and then converting the resulting regression coefficients into a price elasticity using the assumption of rational expectations. Estimated demand shifts can be estimated from observed prices and quantities if demand elasticities are known. We estimated possible ranges in demand elasticities from observed, unique, events that shifted demand. The supportable range of annual demand elasticities and the most likely elasticities are shown in Table 1 for important California tree crops.

Table 1. Estimated Elasticities of Demand for Citrus and Tree Nut Crops

CropLikely RangeMost Likely Elasticity
Almonds[-0.15, -0.45]-0.40
Lemons[-0.20, -0.60]-0.40
Mandarins[-0.30, -0.70]-0.50
Fresh Navel Oranges[-0.30, -0.70]-0.50
Pistachios[-0.30, -0.70]-0.50
Walnuts[-0.10, -0.30]-0.20

California acreage and supply elasticity estimates for almonds, mandarins, pistachios, and walnuts are shown in Table 2. Estimated U.S. corn and soybean elasticities are also shown to facilitate a comparison of estimates made using our new approach and estimates made using more traditional approaches.

Table 2. Calculation of Supply Elasticity from Acreage Response and Demand Elasticity (1980–2019)


Elasticity of
Acreage to Demand

Demand ElasticitySupply Elasticity
Corn0.305-0.35 & -0.250.154 & 0.110
Soybeans         0.281-0.350.137

Economics of Brettanomyces in California Wine Production

Julian Alston and Jarrett Hart


Specific Objectives of the Project:
The aim of this study is to extend upon our initial self-funded pilot study and develop a detailed quantitative economic understanding of Brettanomyces and alternative Brett management practices. Ultimately, we plan to develop a model to estimate potential costs and inform optimal Brett management practices across different segments of the California wine industry.

Project Report/Summary of Results:
We have completed the project, essentially as envisioned, on a 12-month delayed timetable. We have published one paper and we are engaged in continuing discussions with industry representatives about extensions to the work. The project has been very useful for building these relationships.