Targeting of Water Rights Retirement Programs: Evidence from Kansas

Abstract

This article assesses the water use impacts of the Conservation Reserve Enhancement Program in the Upper Arkansas River basin in Kansas, a water rights retirement program aimed at reducing depletion of the High Plains Aquifer. First, I use a fixed effects model with matched samples of farmers to determine the effect of the program on the water use of individuals who retire acreage. I find that every acre authorized for irrigation that is retired in the program represents about 1.28 acre‐feet of water that would have been used each year. Further, I do not find evidence that farmers increase their water use in an effort to satisfy program eligibility requirements. Second, I estimate a probit regression to determine which factors most influence the probability that a farmer retires a water right. Using the results of the probit regression, I then simulate enrollment decisions outside of the policy region to assess how features of the program impact its cost effectiveness and how the policy design could be improved. I find that programs that base incentives on past levels of water extraction lead to more water use reductions per dollar paid.