Groundwater pumping can reduce the flow of surface water in nearby streams. In the United States, recent awareness of this externality has led to intra- and inter-state conflict and rapidly-changing water management policies and institutions. Although the marginal damage of groundwater use on...

Agricultural groundwater use is increasingly being restricted to address the negative impacts of pumping on instream flows for downstream users, endangered species habitat, and recreation. Understanding the spatial heterogeneity of the costs of water use restrictions to farmers is critical to...