The Economic Benefits of Water Rights Adjudication: Evidence from Agricultural Land Sales in Western States
Presented by:
Ha Do
Practice Job Talk
Department of Agricultural and Applied Economics
University of Wisconsin-Madison
Wednesday, September 17, 2025
12:00 pm-1:30 pm
Taylor-Hibbard Seminar Room (Rm103)
Water is an essential but increasingly scarce resource, especially in the Western U.S., where climate change and institutional fragmentation make efficient water regulation challenging. Adjudication, a legal process that formalizes and clarifies water rights, has been implemented to establish clearer and enforceable rights. Despite its potential economic and environmental benefits, empirical evidence on the economic impacts of water rights adjudication remains limited. In this paper, I examine the effects of irrigation water rights adjudication on agricultural land values in Idaho, Oregon, and Washington. Using administrative records, remote sensing data, and land sales transactions, I estimate capitalization effects of adjudicated irrigation rights through a hedonic pricing framework. The results indicate that adjudicated irrigated land's value is higher than unadjudicated land, with most of these effects coming from seniority and irrigation access. However, adjudication itself has no direct effect on land values. The effects are also heterogeneous: downstream users benefit less, although seniority mitigates this disadvantage. I also find evidence that adjudication reallocates water toward more productive land, thus improving efficiency.