Analyzing Policy Approaches to Water Scarcity in the Western United States

Water scarcity in the Western United States has been the focus of recent policy discussion. Researchers and policymakers agree that the implications of water scarcity are severe and widespread, and as such have stressed the importance of addressing water allocation in the short term and long term. However, this urgency has led to some short-term solutions, like rotational fallowing, being implemented without evaluation, or some long-term solutions, like re-structuring of rights, being suggested without precedent. This dissertation aims at reducing the gap between proposed solutions, existing data, and program evaluation by developing and analyzing two novel datasets useful for causal identification, evaluating both a long-term and short-term approach to water scarcity with these data, and finally demonstrating the ability of overlapping institutions to respond to increasing weather variability. Chapter 1 evaluates a short-term approach, rotational fallowing, and identifies the impact of this approach on water savings. Chapter 2 develops novel trade panel data and exploits the only share-based water market in the US: the Colorado-Big Thompson Project. This chapter compares trade and crop choice outside of the CBT, to those same outcomes within the CBT, and identifies the differences. Chapter 3 expands on crop choice within the CBT and identifies the extent to which overlapping institutions can mediate weather variability compared to prior appropriation.