The Economics of Water Resources Essays in Drinking Water Quality and Irrigation Water Use

This dissertation consists of three essays. The first essay studies the economics of drinking water quality and its impact on childhood health. Childhood diarrhea is a major global health crisis and it takes the lives of over a million children every year. Although effective mechanisms such as chlorine tablets exist to reduce childhood diarrhea, there has been a consistent problem in health experiments of maintaining participation amongst poor households. Even when the technology is provided free, households stop using it soon after commencement. We test the hypothesis that participants are not able to see any real effects of chlorine tablets because they do not get a clear signal on efficacy. To this end, we conducted a small field experiment in a poor urban setting (Karachi, Pakistan). The experiment had a simple structure with a control and treatment arm, where both arms received freely delivered chlorine. The major difference between the two arms was that the treatment arm received a visual tool (Info-Tool) which allowed them to track their diarrhea levels in reference to a norm. They used this tool before receiving tablets and a few months into receiving tablets, which allowed them to better detect the efficacy of the tablets. Participation rates were significantly and persistently (very long term) higher in the group that received Info-Tool. The results suggest that providing households with clearer signals on the effect of the tablets made the intervention far more successful. This provides a basis for better structured social policy and interventions that look to provide recipients clearer signals on how they benefit so that their decision to participate is more rational.;The second essay looks at the economics of allocative efficiency of irrigation water in agricultural use. Irrigation systems are critical to agricultural systems in semi-arid parts of the developing world. Although there is ample evidence that canal systems fail to reach their design capacity, there have been surprisingly few studies of the allocation efficiency of water within canal systems. Partly this is due to poor data concerning water withdrawals per farm. This study collects refined measures of water withdrawals and finds evidence supporting the hypothesis that farmers near the head of a canal get more water than farmers near the tail. Accounting for the conveyance efficiency of the canal system ameliorates the efficiency loss somewhat. The analysis builds a strong evidence-based case that water is not allocated efficiently now within the canal. The results suggest that improvements in canal water management or an internal water market would yield efficiency gains for the canal.;The third essay studies the economics of farmer adaptation to heterogeneous canal water allocation. We use a unique dataset to analyze the impact of heterogeneous surface irrigation water supply on farmer choices in a large canal irrigation system in a developing country (Pakistan). Rather than rely on inaccurate and imprecise farmer perceptions, we collected carefully measured data on farmer water use through in-season physical volumetric measurements of surface water delivered. Additionally, agriculture production surveys on large canal systems often rely on farmer reports of location on the system (distance from origin), which can be accurate for a farmer's reported location on the local canal segment her plot is on but can be noisy for reported on location along the overall system. Thus, along with an improved water measure, we also collected precise measurements of farmer location on the canal system allowing for a better sense for distance from the origin.