Markets, Contracts, and Uncertainty in a Groundwater Economy

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dc.creatorJacoby, Hanan G.
dc.creatorGine, Xavier
dc.date2016-06-14T21:35:40Z
dc.date2016-06-14T21:35:40Z
dc.date2016-06
dc.date.accessioned2026-07-01T00:46:00Z
dc.descriptionGroundwater is a vital yet threatened resource in much of South Asia. This paper develops a model of groundwater transactions under payoff uncertainty arising from unpredictable fluctuations in groundwater availability during the agricultural dry season. The model highlights the trade-off between the ex post inefficiency of long-term contracts and the ex ante inefficiency of spot contracts. The structural parameters are estimated using detailed micro-data on the area irrigated under each contract type combined with subjective probability distributions of borewell discharge elicited from a large sample of well-owners in southern India. The findings show that, while the contracting distortion leads to an average welfare loss of less than 2 percent and accounts for less than 50 percent of all transactions costs in groundwater markets, it has a sizeable impact on irrigated area, especially for small farmers. Uncertainty coupled with land fragmentation also attenuates the benefits of the water-saving technologies now being heavily promoted in India.
dc.formatapplication/pdf
dc.identifierhttp://documents.worldbank.org/curated/en/2016/06/26437790/markets-contracts-uncertainty-groundwater-economy
dc.identifierhttps://hdl.handle.net/10986/24534
dc.identifier10.1596/1813-9450-7694
dc.identifier.urihttp://hdl.handle.net/123456789/410655
dc.languageEnglish
dc.languageen_US
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper;No. 7694
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo/
dc.rightsWorld Bank
dc.subjectSUPPLY OF WATER
dc.subjectHOLDING
dc.subjectSPOT PRICE
dc.subjectMOISTURE
dc.subjectDURABLE GOODS
dc.subjectHIGH IRRIGATION
dc.subjectFLOW
dc.subjectACCOUNTING
dc.subjectMARKET DISTORTIONS
dc.subjectPARTICULAR DEBT
dc.subjectSPOT MARKETS
dc.subjectINTEREST
dc.subjectGUARANTEES
dc.subjectAGRICULTURAL PRODUCTION
dc.subjectPUMPS
dc.subjectCULTIVATED AREA
dc.subjectINCENTIVE CONSTRAINT
dc.subjectEXCHANGE
dc.subjectOPTION
dc.subjectPROPERTY RIGHTS
dc.subjectAQUIFER
dc.subjectWATER SUPPLY
dc.subjectDEVELOPING COUNTRIES
dc.subjectGROUNDWATER RECHARGE
dc.subjectPOLITICAL ECONOMY
dc.subjectSURFACE WATER
dc.subjectWATER ALLOCATIONS
dc.subjectASYMMETRIC INFORMATION
dc.subjectHIGH LEVELS
dc.subjectGAS
dc.subjectBUDGET CONSTRAINTS
dc.subjectWATER TABLE
dc.subjectRENEGOTIATION
dc.subjectMARKET FAILURE
dc.subjectTAX
dc.subjectTRANSACTION COST
dc.subjectINTERNATIONAL BANK
dc.subjectWATER RESOURCES
dc.subjectMICRO-DATA
dc.subjectDEVELOPING COUNTRY
dc.subjectOPTIMAL CONTRACT
dc.subjectBUDGET
dc.subjectWITHDRAWALS
dc.subjectWATER REQUIREMENTS
dc.subjectCROP PRODUCTION
dc.subjectSEEPAGE
dc.subjectPARTICIPATION CONSTRAINT
dc.subjectMORAL HAZARD
dc.subjectCONTRACT RENEGOTIATION
dc.subjectMARKET TRANSACTION
dc.subjectCONTRACTS
dc.subjectTRADING
dc.subjectOPTIONS
dc.subjectWATER USE
dc.subjectWATER
dc.subjectDEBT
dc.subjectMARKETS
dc.subjectHOUSEHOLD INCOME
dc.subjectRAINFALL
dc.subjectRETURN
dc.subjectWATER SCARCITY
dc.subjectRESEARCH
dc.subjectAQUIFERS
dc.subjectIRRIGATION WATER
dc.subjectLANDOWNER
dc.subjectRISK SHARING
dc.subjectRESERVES
dc.subjectFINANCE
dc.subjectDRIP IRRIGATION SYSTEMS
dc.subjectTAXES
dc.subjectTRANSACTIONS
dc.subjectEMERGING MARKETS
dc.subjectTRANSACTION
dc.subjectSTORAGE CAPACITY
dc.subjectRISK NEUTRAL
dc.subjectWATER TRANSFER
dc.subjectLEAD
dc.subjectGOOD
dc.subjectCREDIT CONSTRAINTS
dc.subjectTAX RATE
dc.subjectCLIMATE CHANGE
dc.subjectDROUGHT
dc.subjectDERIVATIVE
dc.subjectFUTURE
dc.subjectCULTIVATION
dc.subjectRETURNS
dc.subjectBILATERAL TRANSACTIONS
dc.subjectGROUNDWATER EXPLOITATION
dc.subjectCONTRACT
dc.subjectSOIL MOISTURE
dc.subjectDRY SEASON
dc.subjectDRIP IRRIGATION
dc.subjectPROPERTY
dc.subjectPROPERTIES
dc.subjectTRANSACTION COSTS
dc.subjectSPOT MARKET
dc.subjectMARKET
dc.subjectBROAD RANGE
dc.subjectEX-ANTE INCENTIVES
dc.subjectWELLS
dc.subjectCOORDINATION FAILURE
dc.subjectINSURANCE
dc.subjectRENEGOTIATIONS
dc.subjectWATER AVAILABILITY
dc.subjectGOODS
dc.subjectLANDOWNERS
dc.subjectIRRIGATION SYSTEMS
dc.subjectDURABLE
dc.subjectCOAST
dc.subjectINVESTMENT
dc.subjectOUTLET PIPE
dc.subjectPIPE
dc.subjectSTATISTICS
dc.subjectIRRIGATION
dc.subjectGROUNDWATER
dc.subjectSHARE
dc.subjectMETERS
dc.subjectPOVERTY
dc.subjectTRANSACTIONS COSTS
dc.subjectREVENUE
dc.subjectINVESTMENTS
dc.subjectRISK MANAGEMENT
dc.subjectCONTRACT RENEGOTIATIONS
dc.subjectINCENTIVE CONSTRAINTS
dc.subjectINSTRUMENT
dc.subjectRISK AVERSION
dc.subjectCROPPING DECISIONS
dc.subjectDEEP GROUNDWATER
dc.subjectHUMAN DEVELOPMENT
dc.titleMarkets, Contracts, and Uncertainty in a Groundwater Economy
dc.typeWorking Paper
dc.typeDocument de travail
dc.typeDocumento de trabajo

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