SIMULTANEOUS ESTIMATION OF TECHNOLOGY ADOPTION AND LAND ALLOCATION

The paper considers the econometric modeling of technology adoption when crop choice is simultaneous. Bivariate probit is used to estimate a model of irrigation technology choice and land allocation using a unique field-level data set from California's Central Valley. Special attention is paid to the proper calculation of marginal effects in the bivariate probit model, which are often useful for policy purposes. Estimation results confirm that the choices of irrigation technology and land allocation are simultaneous. With regard to the influence of price incentives on agricultural water use, estimation results from the bivariate probit model indicate that the influence of water price on the adoption of precision irrigation technology is much larger than previously realized. A univariate model of technology choice that treats land allocation as exogenous underestimates the effect of water price on the adoption of precision technology by over 40 percent.Land Economics/Use, Research and Development/Tech Change/Emerging Technologies,

Emerging Markets in Water: A Comparative Institutional Analysis of the Central Valley and Colorado-Big Thompson Projects

Water trading is a potential means to improve the productivity of developed water supplies and reconcile competing uses. Economic theory suggests that markets evolve in response to changes in supply and demand. This prediction is at odds with observed disparities in the pace of market development in regions facing similar pressures on scarce water resources. A dramatic example of this disparity is found in the regions served by the California Central Valley Project and the Colorado-Big Thompson Project.This article argues that the differences in market activity in the two areas can be explained largely by the underlying water allocation institutions. The article identifies key institutional features that affect the transaction costs of water trading and examines the rootsof the institutional diferences. The institutions governing market transactions today are largely a function of pre-existing property rights and political battles to build consensus and obtain federal financing for the projects. The article highlights the path-dependent nature of water allocation institutions and trading, but also suggests that complex inter-regional markets could still develop in California given ever-increasing competition for scarce water resources and advances in information technology that lower market transaction costs

IRRIGATION TECHNOLOGY INVESTMENT WHEN THE PRICE OF WATER IS STOCHASTIC

The paper considers the effect of changes in the distribution of water price on the incentives to adopt water-conserving irrigation technologies. A two-stage decision model is developed wherein agents make long-term decisions about irrigation technology investments and decide production levels based on short-term realizations of water price. Comparative statics results show that the impact of changes in the distribution of water price hinge on the responsiveness of cultivated acreage to fluctuations in the price of water. The model is tested using data on irrigation technology investment from California's San Joaquin Valley. Econometric results strongly support the conceptual model, and show that changes in the distribution of water price have systematically different impacts on permanent and annual crops.Resource /Energy Economics and Policy,

Input Price Risk and the Adoption of Conservation Technology

Replaced with revised version of poster 07/12/11.price risk, technology adoption, matching, propensity score, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, Q1, Q5,

MEASURING THE GAINS FROM MANAGEMENT OF SPATIALLY HETEROGENEOUS RESOURCES: THE CASE OF GROUNDWATER

We develop a model for the dynamic management of spatially heterogeneous resources with multiple users. We apply our model to the case of groundwater and show that contrary to the results of existing studies even when externalities are highly concentrated in space, significant efficiency gains are possible over competitive outcomes.Resource /Energy Economics and Policy,

LOCAL PUBLIC GOODS AND ETHNIC DIVERSITY: EVIDENCE FROM THE IMMIGRATION REFORM AND CONTROL ACT

This paper uses county-level data from California to test whether ethnic fragmentation and other measures of diversity and social capital are systematically related to spending on productive local public goods that affect rural quality of life. The specific focus of this paper is the impact of the Immigration Reform and Control Act (IRCA) of 1986, which brought about 400,000 new immigrants to California, on demographic composition in that state.Public Economics,

Product Liability, Entry Incentives, and Industry Structure

Industrial Organization,

Prices versus Quantities Reconsidered

In comparing second-best prices and quantities, studies assume that quantities bind with probability one. We present a more general and realistic model of second-best regulation where quantity instruments can bind with probability less than one. This additional flexibility of quantity instruments makes them much more efficient than previously realized.Research Methods/ Statistical Methods,

HEALTH TRADEOFFS IN PESTICIDE REGULATION

EPA has the authority to ban pesticides to reduce health risks to consumers from food residues. Such bans influence the price of fruits and vegetables, and the resulting consumption shifts impact consumer health. We develop a framework to compare the direct and indirect health effects of pesticide regulation, and investigate the distribution of these effects across social groups. Under some plausible scenarios, the increased incidence of disease from reduced fruit and vegetable consumption outweigh the direct benefits of regulation. Furthermore, high income consumers receive the greatest direct health benefit from pesticide cancellations, whereas low and medium income consumers are most hurt by the resulting dietary changes.Crop Production/Industries, Health Economics and Policy,

Land Allocation, Soil Quality and the Demand for Irrigation Technology

Land Economics/Use,