Policies that encourage the use of more efficiency irrigation technology are often viewed as effective, politically feasible methods to reduce the consumptive use of water for agricultural production. Despite their widespread use, these policies have not been subject to empirical evaluation. In this article, we evaluate the effect on groundwater extraction of a widespread conversion from traditional center pivot irrigation systems to higher efficiency dropped-nozzle center pivot systems that has occurred in western Kansas. State and national cost-share programs subsidized the conversion. We find that the programs have not had the intended effect; the shift to more efficient irrigation technology has not decreased the amount of water applied to a given crop, and has actually increased groundwater extraction through changing cropping patterns.

Does access to off-farm income complement or compete with agricultural production? This article explores the effect of off-farm income on agricultural production activities, using data from the 2003 Mexico National Rural Household Survey. We first discuss the theoretical conditions under which access to off-farm income may influence production in an agricultural household model. Instrumental-variable (IV) estimation methods are then used to test whether agricultural production activities, technologies, and input use differ between households with and without access to off-farm income. We find that off-farm income has a negative effect on agricultural output and the use of family labor on the farm, but a positive impact on the demand for purchased inputs. There is also a slight efficiency gain in households with access to off-farm income. Findings offer insights into how household production evolves as rural households increasingly engage in off-farm income activities. Copyright (c) 2009 International Association of Agricultural Economists.

a b s t r a c tWe investigate the behavior of farmers who share an underground aquifer. In the case where seepage may occur the resource is nonexclusive, giving rise to a spatial externality whereby pumping by one user affects others nearby. Theoretically, these externalities are potentially important causes of welfare loss. Using a unique spatial data set of groundwater users in western Kansas, we are able to empirically measure the physical and behavioral effects of groundwater pumping by neighbors. To address the simultaneity of neighbors' pumping, we use the neighbors' permitted water allocation as an instrument for their pumping. We estimate that 2.5% of the total groundwater extracted each year in western Kansas is over-extraction due to the effects of spatial externalities. Individuals who own multiple wells internalize their own externality by trading off pumping at one well for pumping at another.

Valuing natural capital is fundamental to measuring sustainability. The United Nations Environment Programme, World Bank, and other agencies have called for inclusion of the value of natural capital in sustainability metrics, such as inclusive wealth. Much has been written about the importance of natural capital, but consistent, rigorous valuation approaches compatible with the pricing of traditional forms of capital have remained elusive. We present a guiding quantitative framework enabling natural capital valuation that is fully consistent with capital theory, accounts for biophysical and economic feedbacks, and can guide interdisciplinary efforts to measure sustainability. We illustrate this framework with an application to groundwater in the Kansas High Plains Aquifer, a rapidly depleting asset supporting significant food production. We develop a 10-y time series (1996−2005) of natural capital asset prices that accounts for technological, institutional, and physical changes. Kansas lost approximately $110 million per year (2005 US dollars) of capital value through groundwater withdrawal and changes in aquifer management during the decade spanning 1996–2005. This annual loss in wealth is approximately equal to the state’s 2005 budget surplus, and is substantially more than investments in schools over this period. Furthermore, real investment in agricultural capital also declined over this period. Although Kansas’ depletion of water wealth is substantial, it may be tractably managed through careful groundwater management and compensating investments in other natural and traditional assets. Measurement of natural capital value is required to inform management and ongoing investments in natural assets.

We examine the effects of energy prices on groundwater extraction using an econometric model of a farmer's irrigation water pumping decision that accounts for both the intensive and extensive margins. Our results show that energy prices have an effect on both types of margins. Increasing energy prices would affect crop selection decisions, crop acreage allocation decisions, and farmers' demand for water. Our estimated total marginal effect, which sums the effects on the intensive and extensive margins, suggests that a $1 per million btu increase in the energy price would decrease water extraction by an individual farmer by 5.89 acre‐feet per year, a decrease of 3.6 percent of the average annual extraction rate. Our estimated elasticity of water extraction with respect to energy price is −0.26.

Haynie, A. C., and Pfeiffer, L. 2012. Why economics matters for understanding the effects of climate change on fisheries. – ICES Journal of Marine Science, 69: . Research attempting to predict the effect of climate change on fisheries often neglects to consider how harvesters respond to changing economic, institutional, and environmental conditions, which leads to the overly simplistic prediction of “fisheries follow fish”. However, climate effects on fisheries can be complex because they arise through physical, biological, and economic mechanisms that interact or may not be well understood. Although most researchers find it obvious to include physical and biological factors in predicting the effects of climate change on fisheries, the behaviour of fish harvesters also matters for these predictions. A general but succinct conceptual framework for investigating the effects of climate change on fisheries that incorporates the biological and economic factors that determine how fisheries operate is presented. The use of this framework will result in more complete, reliable, and relevant investigations of the effects of climate change on fisheries. The uncertainty surrounding long-term projections, however, is inherent in the complexity of the system.

Commercial fishing is a dangerous occupation despite decades of regulatory initiatives aimed at making it safer. We posit that rights-based fisheries management (the individual allocation of fishing quota to vessels or fishing entities, also called catch shares) can improve safety by solving many of the problems associated with the competitive race to fish experienced in fisheries around the world. The competitive nature of such fisheries results in risky behavior such as fishing in poor weather, overloading vessels with fishing gear, and neglecting maintenance. Although not necessarily intended to address safety issues, catch shares eliminate many of the economic incentives to fish as rapidly as possible. We develop a dataset and methods to empirically evaluate the effects of the adoption of catch shares management on a particularly risky type of behavior: the propensity to fish in stormy weather. After catch shares was implemented in an economically important US West Coast fishery, a fisherman's probability of taking a fishing trip in high wind conditions decreased by 82% compared with only 31% in the former race to fish fishery. Overall, catch shares caused the average annual rate of fishing on high wind days to decrease by 79%. These results are evidence that institutional changes can significantly reduce individual, voluntary risk exposure and result in safer fisheries.catch shares | occupational safety | rights-based fisheries management | risk | sustainable fisheries O ccupational health and safety regulations are often instituted in response to market failures that result in a misalignment of workers' risk exposure with their individual preferences (1). The principal justifications for regulatory intervention include excessive risk taking by workers who may not fully understand or recognize the risks they face (imperfect information) or do not bear the full cost of adverse safety outcomes (moral hazard) (2, 3). Labor market frictions and societal concern about the health and safety of those in high-risk occupations provide further motivation for worker protections (3, 4).The commercial fishing industry is affected by these types of market imperfections and is also characterized by potentially high pecuniary rewards for the physical risks involved in fishing. Safety regulations were developed in response to this recognition, as well as the observance of high fatality rates among fishermen (5). In the commercial fishing industry, workplace safety regulation and research has focused on technical solutions such as requirements to carry emergency equipment, participate in safety trainings, and obtain vessel safety examinations (5-9). However, commercial fishing is still one of the most dangerous professions, with an annual average fatality rate of more than 30 times the US average. Despite decades of voluntary and regulatory fishing safety initiatives, the fatality rate has decreased only marginally and has not decreased compared with the average rate for all US workers ( Fig. 1) (10, 11).Fishermen are often ...

This paper illustrates how climate, management, and economic drivers of a fishery interact to affect fishing. Retrospective data from the Bering Sea walleye pollock (Theragra chalcogramma) catcher–processer fishery were used to model the impact of climate on spatial and temporal variation in catch and fishing locations and make inferences about harvester behavior in a warmer climate. Models based on Intergovernmental Panel on Climate Change scenarios predict a 40% decrease in sea ice by 2050, resulting in warmer Bering Sea temperatures. We find that differences in the value of catch result in disparate behavior between winter and summer seasons. In winter, warm temperatures and high abundances drive intensive effort early in the season to harvest earlier-maturing roe. In summer, warmer ocean temperatures were associated with lower catch rates and approximately 4% less fishing in the northern fishing grounds, contrary to expectations derived from climate-envelope-type models that suggest fisheries will follow fish poleward. Production-related spatial price differences affected the effort distribution by a similar magnitude. However, warm, low-abundance years have not been historically observed, increasing uncertainty about future fishing conditions. Overall, annual variation in ocean temperatures and economic factors has thus far been more significant than long-term climate change-related shifts in the fishery's distribution of effort.