Markets, Organizations, and the Environment
Paper Session
Monday, Jan. 5, 2026 8:00 AM - 10:00 AM (EST)
- Chair: Namrata Kala, Massachusetts Institute of Technology
Agriculture, Trade, and the Spatial Efficiency of Global Water Use
Abstract
Over 90% of global water use occurs in agriculture, where two distortions---incomplete water property rights and output-related subsidies and tariffs---shape production decisions. We combine rich geospatial data with a dynamic spatial equilibrium model to quantify the effects of agricultural andtrade policies on water scarcity and welfare. Empirically, we document that water-intensive crops concentrate in water-abundant regions, consistent with comparative advantage, though some regions with water-intensive production exhibit rapid groundwater depletion. Our model captures global patterns of production, consumption, trade, and groundwater use by incorporating dynamic aquifer depletion into a multi-country, multi-crop framework. The model is calibrated to match observed agricultural output and hydrologic trends.
Counterfactual simulations show that eliminating international agricultural trade would significantly accelerate water depletion---especially in dry, food-importing regions---and reduce global welfare. Other agricultural policy liberalizations produce mixed, location-specific effects, highlighting the importance of accounting for spatial heterogeneity in policy design.
Are We Consuming Too Much Groundwater?
Abstract
We study the optimality of groundwater extraction from most of the world’s 3,400 aquifers. Many prominent aquifers have declining levels because human use exceeds recharge. For each aquifer, we use remote sensing and administrative data to estimate a dynamic model of water extraction, recover the discount factor that rationalizes observed groundwater extraction, and compare it against normative and market benchmarks. A majority of the world’s aquifers are extractedsuboptimally; the rest have approximately optimal extraction rates. Suboptimal groundwater extraction creates trillions in global present-value welfare costs, a large magnitude but a small share of aquifer present value. We calculate much larger losses from policies that subsidize water use or guarantee users fixed indefinite water quantities.
Who Bears Climate Change Damages? Evidence from the Gig Economy
Abstract
This paper provides the first causal evidence that gig economy platforms enable consumer adaptation to climate change while shifting climate-related damages to workers. Across diverse markets and climates (UK, Germany, France, and Mexico), I leverage detailed transaction data and labor force surveys and exploit exogenous variation in daily maximum temperatures. On hot days relative to moderate days, I find an 8-16% increase in food delivery expenditures and a similar decline in dine-in restaurant spending, driven primarily by higher-income consumers. On these days, food delivery workers work 1.7 hours more on average, exposing them to material health risks. Yet, I find that their hourly wages do not increase, despite the flexibility of wages in this setting. This response to heat is unique to platform-based work. I show that worker beliefs are the main mechanism: platform workers believe that declining tasks - particularly during periods of peak demand such as hot days - deprioritizes them for future work. My findings raise broader questions about algorithmic fairness and highlight environmental equity concerns from unequal access to climate adaptation.Discussant(s)
Susanna Berkouwer
,
University of Pennsylvania
Dev Patel
,
Brown University
Shresth Garg
,
University of Pennsylvania
B. Kelsey Jack
,
University of California-Berkeley
JEL Classifications
- Q53 - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling