| Evidence suggests that advances in technology may be hastening the physical exhaustion of the Ogallala aquifer. This situation places the State of Kansas in a difficult situation. In administering water policy, State agencies are required to achieve an absolute reduction in water consumption, while at the same time maintaining the economic viability of irrigated agriculture in western Kansas. In order to maintain the profitability of irrigated agriculture, technological innovations need to continually be developed through research and adopted by the agricultural community. The question is how to allow this process to continue while at the same time reducing water consumption from the Ogallala aquifer.; One potential policy alternative is the Voluntary Water Rights Transition Program (VWRTP) currently under consideration by the State of Kansas. In order to implement the VWETP, the State of Kansas, policy makers, and stakeholders need input from the economic community on both program structure as well as the market value of water rights.; This research suggests that the value of water for agricultural purposes depends upon the spatially fixed, site-specific characteristics of the land on which the water is used. These factors include water source, soil type, crop type, depth to water, saturated thickness of the aquifer, the seniority level of the water right, average annual water usage, and local precipitation.; Conventional as well as spatial econometric hedonic models were developed to estimate the value of water rights in the Rattlesnake Creek Sub-basin. The spatially unadjusted OLS hedonic models for irrigated and nonirrigated land are considered to be the superior models. Results indicate that there is significant variation in the value of water rights within a given county. The results of this research will be beneficial to the State in the administration of the VWRTP. This information can be used to set the maximum acceptable bids and/or assess the reasonableness of a particular bid. The data might also be useful in program budgeting and/or predicting program success.; The regression analysis associated with this dissertation also suggests that the markets for nonirrigated land and irrigated land are separate and distinct and should be modeled separately. The analysis also suggests that the market for irrigated land may be neither competitive nor efficient. |
