Abstract
We use the geo-referenced June Agricultural Survey of the U.S. Department of Agriculture to match values of individual farms in California with a measure of water availability as mediated through irrigation districts, and degree days, a nonlinear transformation of temperature, controlling for other influences on value such as soil quality, to examine the potential effects of climate change on irrigated agriculture in California. Water availability strongly capitalizes into farmland values. The predicted decrease in water availability in the latest climate change scenarios downscaled to California can therefore be expected to have a significant negative impact on the value of farmland.
Similar content being viewed by others
References
Burness, H. S. and Quirk, J. P.: 1979, ‘Appropriative water rights and the efficient allocation of resources’, Am. Econ. Rev. 69(1), 25–37.
Burness, H. S. and Quirk, J. P.: 1980, ‘Economic aspects of appropriative water rights’, J. Environ. Econ. Manage. 7(4), 372–388.
Conley, T. G.: 1999, ‘GMM estimation with cross sectional dependence’, J. Econometrics 92(1), 1–45.
Crouter, J. P.: 1987, ‘Hedonic estimation applied to a water rights market’, Land Econ. 63(3), 259–271.
Darwin, R.: 1999, ‘The impact of global warming on agriculture: A Ricardian analysis: comment’, Am. Econ. Rev. 89(4), 1049–1052.
Deschenes, O. and Greenstone, M.: 2004, Economic impacts of climate change: Evidence from agricultural profits and random fluctuations in weather. NBER working paper 10663, August 2004.
Doll, J. P.: 1967, ‘An analytical technique for estimating weather indexes from meteorological measurements’, J. Farm Econ. 49(1), 79–88.
Faux, J. and Perry, G. M.: 1999, ‘Estimating irrigation water value using hedonic price analysis: A case study in Malheur County, Oregon’, Land Econ. 75(3), 440–452.
Gardner, B. D. and Huffaker, R. G.: 1988, ‘Cutting the loss from federal irrigation subsidies’, Choices, 1988, Forth Quarter, 24–26.
Gleick, P. H. and Chalecki, E. L.: 1999, ‘The impacts of climatic changes for water resources of the Colorado and Sacramento-San Juaquin River Basins’, J. Am. Water Resour. Assoc. 35(6), 1429–1441.
Hamlet, A. F. and Lettenmaier, D. P.: 1999, ‘Effects of climate change on hydrology and water resources in the Columbia River Basin’, J. Am. Water Resour. Assoc. 35(6), 1597–1623.
Hartman, L. M. and Anderson, R. L.: 1962, ‘Estimating the value of irrigation water from farm sales data in Northeastern Colorado’, J. Farm Econ. 44, 207–213.
Huffaker, R. G. and Gardner, B. D.: 1986, ‘The distribution of economic rents arising from subsidized water When land is leased’, Am. J. Agric. Econ. 68(2), 306–312.
Johnson, S. R. and Haigh, P. A.: 1970, ‘Agricultural land price differentials and their relationship to potentially modifiable aspects of the climate’, Rev. Econ. Stat. 52(2), 173–180.
Katherine H., et al.: 2004, ‘Emissions pathways, climate change, and impacts on California’, Proc. Natl. Acad. Sci. 101(34), 12422–12427.
Kaufmann, R. K.: 1998, ‘The impact of climate change on US agriculture: A response to Mendelsohn et al. (1994)’, Ecol. Econ. 26, 113–119.
Leamer, E. E.: 1983, ‘Let’s take the Con out of econometrics’, Am. Econ. Rev. 73(1), 31–43.
Lehman, R. L.: 1987, ‘Probability distributions of monthly degree day variables at U.S. Stations. Part I. Estimating the mean value and variance from temperature data’, J. Clim. Appl. Meteorology 26(3), 329–340.
Lettenmaier, D. P. and Sheer, D. P.: 1991, ‘Climatic sensitivity of California water resources’, J. Water Resour. Plann. Manage. 117(1), 108–125.
Leung, L. R. and Wigmosta, M. S.: 1999, ‘Potential climate change impacts on mountain watersheeds in the Pacific Northwest’, J. Am. Water Resour. Assoc. 35(6), 1463–1471.
McCabe, Jr. G. J. and Wolock, D. M.: 1992, ‘Sensitivity of irrigation demand in humid-temperate region to hypothetical climatic change’, Water Resour. Bull. 28(3), 535–543.
Mendelsohn, R. and Dinar, A.: 2003, ‘Climate, water, and agriculture’, Land Econ. 79(3), 328–341.
Mendelsohn, R., Nordhaus, W. D., and Shaw, D.: 1994, ‘The impact of global warming on agriculture: A Ricardian analysis’, Am. Econ. Rev. 84(4), 753–771.
Moulton, B. R.: 1986, ‘Random group effects and the precision of regression estimates’, J. Econ. 32(3), 385–397.
Mundlak, Y.: 1961, ‘Empirical production function free of management bias’, J. Farm Econ. 43(1), 44–56.
Oury, B.: 1965, ‘Allowing for weather in crop production model building’, J. Farm Econ. 47(2), 270–283.
Plantinga, A. J., Lubowski, R. N., and Stavins, R. N.: 2002, ‘The effects of potential land development on agricultural land prices’, J. Urban Econ. 52(3), 561–581.
Renshaw, E. F.: 1958, ‘Scientific appraisal’, Natl. Tax J. 11(4), 314–322.
Ritchie, J. T. and NeSmith, D. S.: 1991, ‘Temperature and crop development. In: Hanks J, Richie JT (eds) Modeling plant and soil systems, Agronomy 31. American Society of Agronomy, Madison, WI, pp 5–29.
Schlenker, W., Hanemann, W. M., and Fisher, A. C.: 2005, ‘Will U.S. agriculture really benefit from global warming? Accounting for irrigation in the hedonic approach’, Am. Econ. Rev. 95(1), 395–406.
Schlenker, W., Hanemann, W. M., and Fisher, A. C.: 2006, ‘The impact of global warming on U.S. agriculture: An econometric analysis of optimal growing conditions,’ Rev. Econ. Stat. 88(1), 113–125.
Selby, H. E.: 1945, ‘Factors affecting value of land and water in irrigated land’, J. Land Public Utility Econ. 21(3), 250–258.
Thom, H. C. S.: 1966, ‘Normal degree days above any base by the universal truncation coefficient’, Mon. Weather Rev. 94(7), 461–465.
Thom, H. C. S.: 1954, ‘The rational relationship between heating degree days and temperature’, Mon. Weather Rev. 82(1), 1–6.
United States Department of Agriculture (1994) State Soil Geographic Data Base (STATSGO), Technical Report Miscellaneous Publication Number 1492, Natural Resource Conversation Service. National Soil Service Center.
United States Department of Agriculture (1995) Soil Survey Geographic Data Base (SSURGO), Technical Report Miscellaneous Publication Number 1527, Natural Resources Conversation Service. National Soil Survey Center.
United States Department of Agriculture (2000) Summary Report 1997 National Resources Inventory, Technical Report, Natural Resources Conservation Service. Iowa State University Statistical Laboratory.
U.S. Census Bureau (2002) 2000 Census of Population and Housing. Summary Population and Housing Characteristics. PHC-1-6 California.
Whittlesey, N. K. and Herrell, J. P.: 1987, ‘Impact of energy cost increases on irrigated land values’, West. J. Agric. Econ. 12(1), 1–7.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Schlenker, W., Hanemann, W.M. & Fisher, A.C. Water Availability, Degree Days, and the Potential Impact of Climate Change on Irrigated Agriculture in California. Climatic Change 81, 19–38 (2007). https://doi.org/10.1007/s10584-005-9008-z
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10584-005-9008-z