1. Essays on Irrigation
- Author
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Loeser, John Ashton, Magruder, Jeremy1, Loeser, John Ashton, Loeser, John Ashton, Magruder, Jeremy1, and Loeser, John Ashton
- Abstract
In the first chapter, I estimate an elasticity of irrigation adoption to its gross returns in rural India. Many approaches to estimating this elasticity fail when agents select into adopting irrigation on heterogeneous gross returns and costs. I develop a novel approach to correct for selection using two instrumental variable estimators that can be implemented with aggregate data on gross revenue and adoption of irrigation. I use climate and soil characteristics as an instrument for gross returns to irrigation, and hydrogeology as an instrument for irrigation to correct for selection. I estimate that a 1% increase in the gross returns to irrigation causes a 0.7% increase in adoption of irrigation. I use this elasticity to infer changes in profits from changes in adoption of irrigation caused by shocks to its profitability, and to conduct counterfactuals. First, groundwater depletion from 2000-2010 in northwestern India permanently reduced economic surplus by 1.2% of gross agricultural revenue. Second, I evaluate a policy that optimally reduces relative subsidies for groundwater irrigation in districts with large negative pumping externalities, while holding total subsidies fixed. Under the policy, depletion caused by subsidies decreases by 16%, but farmer surplus increases by only 0.07% of gross agricultural revenue.In the second chapter, co-authored with Maria Jones, Florence Kondylis, and Jeremy Magruder, we examine the returns to newly-constructed hillside irrigation schemes in Rwanda using a very granular spatial regression discontinuity design. We find that irrigation enables dry season horticultural production which is associated with large increases in labor and input usage and boosts on-farm yields and cash profits by 70%. At the same time, irrigation use remains limited after 4 years. We leverage the spatial discontinuity in access to irrigation to develop a test for separation failures based on farmer behavior on other plots and conclude that separation fa
- Published
- 2019