Projects Funded for Susan Stratton

2007-2008

An Economic and Political Investigation of Groundwater Management

Abstract

This research project assesses the political implications of intra-aquifer heterogeneity in the benefits and costs of optimal groundwater management. We use simulation modeling to predict groundwater extraction regimes under two alternative local decision-making structures and compare these structures to optimal management. Local collective action performs poorly when the intra-aquiferdisparity in the potential gains is large. As a result, local collective action is unlikely to be successful in capturing the largest welfare gains. Individual subregions within a groundwater basin almost always benefit most from political structures whose outcomes diverge from optimal management. The analysis in this paper suggests that there may be regions where large potential gains from optimal management are available, but cannot be realized by the two alternative local political institutions. Thus, there may be a role for State intervention in the local political processes by which local water management decisions are made.

Publications

"Property Rights and Water Transfers: Bargaining Among Multiple Stakeholders" (with Susan Stratton Sayre and Leo K. Simon). Strategic Behavior and the Environment 1(1): 1-29, 2010.

"Local Negotiation with Heterogeneous Groundwater Users" (with Susan Stratton Sayre and Leo K. Simon). Forthcoming in Strategic Behavior and the Environment.