The Dynamic Impacts of Pricing Groundwater

Ellen M. Bruno; Katrina K. Jessoe; W. Michael Hanemann

doi:10.1086/728988

The Dynamic Impacts of Pricing Groundwater

Ellen M. Bruno, Katrina K. Jessoe, W. Michael Hanemann

Research output: Contribution to journal › Article › peer-review

1 Scopus citations

Abstract

This study evaluates own-price dynamics in taxing environmental externali-ties. We exploit a natural experiment that exposed some firms to a large and persistent price increase for groundwater, a setting characterized by incomplete markets. Using five years of posttreatment data on farm-level water use, we find that water conservation doubles between the first and fifth year of the tax. Failure to account for dynamics in policies designed to manage groundwater will mischaracterize the price elasticity of demand and introduce efficiency costs.

Original language	English (US)
Pages (from-to)	1201-1227
Number of pages	27
Journal	Journal of the Association of Environmental and Resource Economists
Volume	11
Issue number	5
DOIs	https://doi.org/10.1086/728988
State	Published - Sep 2024
Externally published	Yes

Keywords

agri-culture
dynamic effects
environmental regulation
groundwater
market-based approaches

ASJC Scopus subject areas

Economics and Econometrics
Nature and Landscape Conservation
Management, Monitoring, Policy and Law

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10.1086/728988

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The Dynamic Impacts of Pricing Groundwater

Abstract

Keywords

ASJC Scopus subject areas

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