American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Way Down in the Hole: Adaptation to Long-Term Water Loss in Rural India
American Economic Review
(pp. 200–224)
(Complimentary)
Abstract
Worsening environmental conditions threaten to undermine progress in reducing rural poverty. Little is known, however, about the prospects for farmer adaptations to mitigate this threat, in particular through opportunities for income diversification presented by recent non-agricultural growth. We study the effects of increasing water scarcity in India using quasi-random, geologically determined differences in access to groundwater. The drying up of wells results in a precipitous and persistent decline in farm income and wealth, with little evidence of agricultural adaptation. However, labor reallocation to off-farm employment appears successful in maintaining overall income, particularly in locations with a more developed manufacturing sector.Citation
Blakeslee, David, Ram Fishman, and Veena Srinivasan. 2020. "Way Down in the Hole: Adaptation to Long-Term Water Loss in Rural India." American Economic Review 110 (1): 200–224. DOI: 10.1257/aer.20180976Additional Materials
JEL Classification
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- Q12 Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- Q15 Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
- Q18 Agricultural Policy; Food Policy
- Q25 Renewable Resources and Conservation: Water
- Q28 Renewable Resources and Conservation: Government Policy