Department of Economics
The Endangered Species Act and Agriculture: AStudy of Water Restrictions
- Author(s): Bongard, Louis
- Advisor(s): Libecap, Gary
- et al.
The periodic curtailment of water exports from the Sacramento-San Joaquin Bay Delta to protect
fish species listed under the Endangered Species Act represents a perennial source of conflict
between environmental and agricultural interests in Central California. This paper seeks to
quantify the relationship between the restriction of water exports and the resulting economic
losses to farmers measured in terms of employment and value of production. Using a difference-in-difference framework to compare the San Joaquin Valley to the neighboring Sacramento
Valley, this paper finds that there are demonstrable losses to employment but not annual value
produced. It then makes the inference that these results occur because farmers have the ability to
re-optimize crop mixes in response to the amount of available water.