The Impact of Irrigation Restrictions on Cropland Values in Nebraska

Given the expansive water consumption of the agricultural sector in the western United States, irrigation practices have increasingly been restricted as a way to combat water scarcity. Using segment-level panel data on land values and irrigation status, we measure the extent to which irrigation restrictions are capitalized into irrigated and nonirrigated cropland values in Nebraska. On average, irrigation restrictions did not have a measurable impact on farmland values across 1999-2012. However, our results show that the effects of the restrictions vary considerably over time and that basins that were more dependent on irrigation were disproportionately impacted by the restrictions.