Investigating Economic and Climate Signals in Groundwater Data

Hydrologic, climatic, regulatory and economic factors interact in complex ways to influence groundwater conditions. These relationships can be difficult to measure and model but are important for water management and for considering viable futures for regional economies. This paper proposes a strategy for an improved understanding of how groundwater levels reflect signals of regulatory, economic and climate factors. Most existing econometric studies of groundwater use focus on large-scale irrigated agriculture and urbanized areas in first world nations, where groundwater extraction data is available. In much of the world, groundwater extraction data are not available for individual farms and other water users. The goal of this study is to explore the responsiveness of groundwater levels (a more widely available measure of groundwater conditions) to regulatory, economic and climate signals in rural areas, using a growing body of remotely sensed land cover data. Pooled Ordinary Least Squares econometric models examine the effects of regulatory, climatic and economic factors on groundwater levels in rural Arizona. Groundwater regulations, recharge projects, housing units and irrigated acreage have statistically significant relationships to groundwater levels in the study areas. This approach can be valuable for understanding factors that influence groundwater conditions and which may be useful in managing groundwater use in widespread areas where groundwater extraction data is unavailable.