Title: “Public Benefits of Private Technology Adoption: Localized Spatial Externalities of Water Conservation in India”

Researcher: Anil Bhargava

Conference: Pacific Development Conference, UC San Diego

Abstract:

With growing pressure on groundwater resources, water-conserving technologies (WCTs) look especially promising as a method of agricultural adaptation and poverty alleviation. But while the private benefits of WCTs are becoming better understood, the public benefits of adoption are not as clear as they may seem. While some have highlighted behavioral responses to private adoption, this paper focuses on the geo-physical complications that shape public benefits across landscapes. This raises intriguing spatial considerations of the WCT adoption decision and optimal diffusion patterns that can inform policymakers with the dual objectives of cost-efficient natural resource conservation and poverty alleviation. We focus on India—the world’s largest user of groundwater—and build a hydro-economic model to capture changes in public water availability due to WCT adoption. We then translate this into monetary terms using costs of water extraction from plot-level data. We calibrate our model using a 2011 household-plot survey and estimates from a randomized control trial of a specific WCT in the country’s Indo-Gangetic Plains. Results suggest that early-adoption public benefits from WCTs occur primarily via reduced well interference when underground aquifers are large. Thus, initially clustering WCTs can generate localized spatial externalities compared to a uniform distribution. Preliminary results demonstrate initial increasing returns of clustering technology, suggesting optimal adoption concentrations within a cluster and diffusion to other clusters. At later stages of WCT diffusion, aquifers may become an increasingly relevant channel in maintaining water availability. Understanding the geo-physical aspects and spatial economics of WCT adoption patterns can inform policies aimed at both poverty alleviation and water conservation.