Water Resources Research Act Program

Details for Project ID 2006TX231B

A Pricing Model to Assess the Effect of Groundwater Availability on Land Valuation

Institute: Texas
Year Established: 2006 Start Date: 2006-03-01 End Date: 2007-02-28
Total Federal Funds: $5,000 Total Non-Federal Funds: $12,349

Principal Investigators: Robert Taylor, Lal Almas

Project Summary: Groundwater plays a crucial role in agriculture on the High Plains. The Ogallala Aquifer provides 90% of the water used in agriculture in the Texas Panhandle. While the adoption of new technology has resulted in a more efficient use of groundwater, the region still is faced with declining aquifer levels. This is due primarily to the slow or non-existent recharge rate of the aquifer in the High Plains and the increased levels of irrigation by producers. There is a need for increased efforts in water conservation in order to retard the depletion of the aquifer. Land valuation, both for taxing entities as a tax base and for the purchase and sale of property, does not always accurately reflect the availability of water under the land in question. Additionally, the recent purchasing of water rights in the region has raised further issues concerning how the value of the available water should be considered, both for tax purposes (regionally in the form of property tax and nationally in the form of capital gains and losses taxes). This study seeks to determine the actual dollar value per acre-foot of water that is available below the surface of the land as it applies to the total property value.