Estimating the Demand for Groundwater: A Second-stage Hedonic Land Price Analysis for the Lower Mississippi River Alluvial Plain, Arkansas

Authors

Kent Kovacs, University of Arkansas, FayettevilleFollow
Sheby Rider, University of Arkansas, Fayetteville

Document Type

Article

Publication Date

2-2023

Keywords

demand estimation; natural resource wealth; weak sustainability

Abstract

We estimate the benefits of the saturated thickness (water-bearing porous material) of the alluvial aquifer in Arkansas through an application of the hedonic price model to the sale of agricultural land. There is evidence from the first-stage analysis of diminishing returns from increasing saturated thickness. Using a survey of farmer operators’ preferences and socioeconomic characteristics, we recover the underlying demand function for saturated thickness in a second-stage analysis. Shifts in the demand function reveal that produced/social capital can be a substitute or a complement to saturated thickness, and human capital is a substitute for saturated thickness.

Citation

Kovacs, K., & Rider, S. (2023). Estimating the Demand for Groundwater: A Second-stage Hedonic Land Price Analysis for the Lower Mississippi River Alluvial Plain, Arkansas. Journal Of Agricultural And Applied Economics, 55, 194-216. https://doi.org/10.1017/aae.2023.15

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.