Environmental markets are widely prescribed as an alternative to open access regimes for natural resources. We develop a model of dynamic groundwater extraction to demonstrate how a spatial regression discontinuity design that exploits a spatially incomplete market for groundwater rights recovers a lower bound on the market’s net benefit. We apply this estimator to a major aquifer in water-scarce southern California and find that a groundwater market generated substantial net benefits, as capitalized in land values. Heterogeneity analyses point to gains arising in part from rights trading, enabling more efficient water use across sectors. Additional findings suggest that the market increased groundwater levels.

中文翻译：

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环境市场是否因开放获取而改善？来自加利福尼亚地下水权的证据

环境市场被广泛规定为自然资源开放获取制度的替代方案。我们开发了一个动态地下水提取模型，以展示利用空间不完整的地下水权市场的空间回归不连续性设计如何恢复市场净收益的下限。我们将此估算器应用于缺水的南加州的一个主要含水层，发现地下水市场产生了可观的净收益，如土地价值资本化。异质性分析表明，收益部分来自权利交易，从而实现跨部门更有效的用水。其他调查结果表明，市场增加了地下水位。