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Do Environmental Markets Improve on Open Access? Evidence from California Groundwater Rights / Andrew B. Ayres, Kyle C. Meng, Andrew J. Plantinga.
- Format:
- Book
- Author/Creator:
- Ayres, Andrew.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w26268.
- NBER working paper series no. w26268
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2019.
- Summary:
- Environmental markets are widely prescribed as an alternative to open-access regimes for natural resources. We develop a model of dynamic groundwater extraction to demonstrate how a spatial regression discontinuity design that exploits a spatially-incomplete market for groundwater rights recovers a lower bound on the market's net benefit. We apply this estimator to a major aquifer in water-scarce southern California and find that a groundwater market generated substantial net benefits, as capitalized in land values. Heterogeneity analyses point to gains arising in part from rights trading, enabling more efficient water use across sectors. Additional findings suggest the market increased groundwater levels.
- Notes:
- September 2019.
- Print version record
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