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Full-Text Articles in Social and Behavioral Sciences
Technology Adoption In The Presence Of An Exhaustible Resource: The Case Of Groundwater Extraction, Ujjayant N. Chakravorty, Farhed Shah, David Zilberman
Technology Adoption In The Presence Of An Exhaustible Resource: The Case Of Groundwater Extraction, Ujjayant N. Chakravorty, Farhed Shah, David Zilberman
Ujjayant Chakravorty
In this paper we integrate technology diffusion within Hotelling's exhaustible resource model. The modern technology is a conservation technology such as drip irrigation used with groundwater. Resource quality heterogeneity and rising water prices are responsible for the gradual adoption of the modern technology, and under reasonable conditions the diffusion curve is an S-shaped function of time. Without intervention, the diffusion process will be slower than is socially optimal, and optimal resource use tax will accelerate the diffusion of the conservation technology and slow down excessive resource depletion caused by market failure due to open access conditions.
A Spatial Model Of Optimal Water Conveyance, Ujjayant N. Chakravorty, Eithan Hochman, David Zilberman
A Spatial Model Of Optimal Water Conveyance, Ujjayant N. Chakravorty, Eithan Hochman, David Zilberman
Ujjayant Chakravorty
Most water projects suffer from losses in conveyance. Because conveyance has public good characteristics, investment in reducing conveyance losses must be provided by a central authority. This paper develops a spatial model to determine optimal conveyance investment, water allocation, and investment in firm-specific conservation technology. The efficiency and distributional characteristics of the optimal solution are compared to projects with (i) well-developed water markets and (ii) spatially uniform water prices, both with sub-optimal conveyance. A numerical illustration is provided.