Estimating the causal effect of water scarcity on the groundwater use efficiency of rice farming in South India

There is no consensus among researchers on the influence of scarcity on common pool resource use: some suggest that scarcity leads to prudent use, whereas others suggest that it will cause over-extraction of resources. This issue is particularly of interest for developing countries, where natural resources are becoming scarce at an alarming rate. This paper investigates the causal association between water scarcity and groundwater use efficiency in a rice based cropping system in south India, where groundwater is increasingly becoming a scarce resource. Contextualization of the work is done under the premise of reported contradictions concerning the scarcity - efficiency nexus. Using a two stage approach the causality is estimated: first, farm level groundwater use efficiency (GWUE) scores are calculated using non-parametric efficiency analysis, and then these inefficiencies are linked to farm level scarcity indicators using the Inverse Probability Weighting method. Our results showed a negative causal association between farm level water scarcity and GWUE, indicating the existence of competitive appropriation behavior in the face of scarcity. Hence, policy measures to conserve groundwater should include supply enhancement to remove the threat of immediate scarcity on farm to avoid inefficient pumping in addition to demand management measures and improved governance. (C) 2012 Elsevier B.V. All rights reserved.