Estimating the Value of Groundwater in the High Plains of Texas

The stock value of groundwater resources is important to be calculated to improve the economic efficiency of their uses. This value is calculated for the High Plains of Texas (HPT), which is a region that overlies parts of the Ogallala Aquifer. The stock value of groundwater is estimated as the difference between the price of irrigated farms and dryland farms in the HPT. For this purpose, a unique set of data that comprises information on actual farm sale prices, other farm characteristics, data on saturated thickness and depth to the aquifer below each farm, and other control variables is used. Data on aquifers characteristics for each specific farm are obtained from a network of observation wells located in the region. Results indicate that stock values of groundwater in the HPT are of significant magnitude that they deserve consideration in groundwater management policies.