Working Paper: NBER ID: w17625
Authors: Richard Hornbeck; Pinar Keskin
Abstract: Agriculture on the American Great Plains has been constrained by historical water scarcity. After World War II, technological improvements made groundwater from the Ogallala aquifer available for irrigation. Comparing counties over the Ogallala with nearby similar counties, groundwater access increased irrigation intensity and initially reduced the impact of droughts. Over time, land-use adjusted toward water-intensive crops and drought-sensitivity increased; conversely, farmers in water-scarce counties maintained drought-resistant practices that fully mitigated higher drought-sensitivity. Land values capitalized the Ogallala's value at $26 billion in 1974; as extraction remained high and water levels declined, the Ogallala's value fell to $9 billion in 2002.
Keywords: Ogallala aquifer; groundwater; agriculture; drought sensitivity; land use adaptation
JEL Codes: N52; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Groundwater access from the Ogallala aquifer (Q15) | Increased irrigation intensity in Ogallala counties (Q15) |
| Increased irrigation intensity in Ogallala counties (Q15) | Reduced sensitivity of crop yields to drought (Q54) |
| Increased irrigation intensity (Q15) | Shift towards more water-intensive crops (Q15) |
| Shift towards more water-intensive crops (Q15) | Increased sensitivity of yields to drought (Q54) |
| Groundwater access from the Ogallala aquifer (Q15) | Changes in land values (R52) |