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Understanding inequality in groundwater access and cropland ownership is critical for assessing the sustainability and equity of agricultural systems, especially in regions facing climatic and socioeconomic patterns such as drought and cropland consolidation. These two forms of access are deeply interconnected: for instance, cropland ownership often determines who can access and control groundwater. Due to data challenges, however, few studies have quantified groundwater access inequality in the same ways that land ownership has been quantified. Similarly, the regional scale of most analyses to date limits our understanding of factors that shape and modify these interconnections. Our study aims to address this gap by constructing a novel geospatial dataset by matching groundwater wells with cropland parcels across California’s Central Valley. We quantify the magnitude and spatial patterns of groundwater and cropland inequality and examine how it scales with land ownership, crop types, and surface water access. Our results indicate substantial inequality in both groundwater access and land ownership, with the top decile of well owners possessing 46.4% of the region’s total well capacity. These well owners are more likely to allocate groundwater to high-revenue, water-intensive perennials such as almonds and walnuts. Furthermore, large landholders tend to have far more wells, deeper and higher-capacity wells, and greater access to surface water resources. However, we observe consistently wider inequality in land ownership than water access, and larger landowners possess less well depth and capacity per hectare. We discuss the implications of these findings in the context of California’s historical lack of regulation on groundwater, particularly with respect to inequality in open access vs private property resources. We also consider possible lessons for future groundwater regulation and distribution mechanisms for groundwater rights under California’s Sustainable Groundwater Management Act.
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The capitalization of property rights to groundwater
Abstract There is limited empirical evidence on the value of formal property rights to natural resources when they are not transferable, and there is regulatory uncertainty about enforcement. This paper takes a hedonic approach to understanding how three core features of groundwater property rights—access, allocation, and seniority—are capitalized into agricultural land values in the High Plains Aquifer region of Kansas. We find that groundwater access rights confer an average land value premium of 71%, or $1445/acre in 2019 dollars. Water rights having larger allocations and more seniority are more highly valued in the land market. The seniority effect is small but is consistent with more junior rights facing greater regulatory risk of curtailment. Taken together, these results suggest that the land market capitalizes constraints to groundwater pumping provided by groundwater property rights. We use our empirical estimates to quantify the distributional costs of modifying existing patterns of pumping, a common challenge of groundwater management organizations seeking to improve the sustainability of extraction.
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- Award ID(s):
- 2316295
- PAR ID:
- 10542274
- Publisher / Repository:
- Wiley-Blackwell
- Date Published:
- Journal Name:
- American Journal of Agricultural Economics
- ISSN:
- 0002-9092
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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