Does Agriculture Generate Local Economic Spillovers? Short-Run and Long-Run Evidence from the Ogallala Aquifer

31 Pages Posted: 22 Sep 2012 Last revised: 28 Apr 2021

See all articles by Richard Hornbeck

Richard Hornbeck

University of Chicago - Booth School of Business

Pinar Keskin

Wellesley College - Department of Economics

Date Written: September 2012

Abstract

Agricultural development may support broader economic development, though agricultural expansion may also crowd-out local non-agricultural activity. On the United States Plains, areas over the Ogallala aquifer experienced windfall agricultural gains when post-WWII technologies increased farmers' access to groundwater. Comparing counties over the Ogallala with nearby similar counties, local non-agricultural sectors experienced only short-run benefits. Despite substantial persistent agricultural gains, there was no long-run expansion of local non-agricultural sectors and there are some indications of crowd-out. With the benefit of long-run historical perspective, supporting local agricultural production does not appear to generate local economic spillovers that might justify its distortionary impacts.

Suggested Citation

Hornbeck, Richard and Keskin, Pinar, Does Agriculture Generate Local Economic Spillovers? Short-Run and Long-Run Evidence from the Ogallala Aquifer (September 2012). NBER Working Paper No. w18416, Available at SSRN: https://ssrn.com/abstract=2150547

Richard Hornbeck (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 South Woodlawn Avenue
Chicago, IL 60637
United States

Pinar Keskin

Wellesley College - Department of Economics ( email )

106 Central Street
Wellesley, MA 02181
United States

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