What water are we really pumping? The nature and extent of surface and groundwater substitutability in Australia and implications for water management policies

Date

2021

Authors

Wheeler, S.A.
Zuo, Z.
Kandulu, J.

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Journal article

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Applied Economic Perspectives and Policy, 2021; 43(4):1550-1570

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Sarah Ann Wheeler, Alec Zuo, and John Kandulu

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Abstract

Little is known about the interdependence between surface and groundwater extractions and trade. Groundwater metered extraction was modelled at the bore level (n = 1,890) in the Goulburn-Murray Irrigation District, Victoria, from 2007–08 to 2016–17 to understand its associations with hydrologic, location, climatic, and economic factors. Surface and groundwater extractions were found to be substitutes for each other, with groundwater extractions statistically significantly increasing when: (i) bores were closer to surface water watercourses, (ii) surface water allocations and rainfall were lower, and (iii) surface water temporary market prices and entitlement trade out-of-zone volumes were higher. Other key groundwater extraction influences included pumping costs and commodity prices.

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Dissertation Note

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Submitted 24 April 2020; editorial decision 20 August 2020

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© 2020 Agricultural and Applied Economics Association

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