Externality costs and factors affecting groundwater overexploitation in Mamasani

 
This study investigates externality costs of groundwater overexploitation and its determinants in Mamasani a county of Fars province in Iran. Conditional probability and farmer^'s marginal willingness to pay on investment for drilling well and/or increasing depth of existence wells as the proxy for negative externality costs were estimated applying Logit and Tobit models to data collected from 135 farmers in the region.
The results showed that farmer's willingness to pay for investment of drilling well and/or increasing depth of wells for extraction of water impose relatively high quantity of negative externality costs that farmer's imposes to the society through irregular exploitation of groundwater. Also, the results revealed that credit, size of holding, ratio of irrigated area under vegetables and patch, and ratio of irrigated area under cereals have the highest effects on either farmer's willingness to pay to invest or on negative externality costs. This indicates that despite water scarcity, crop pattern has changed towards high water intensive and profitable crops. Also, the threshold level of holding after which a farmer is willing to invest in drilling well was determined to be 4.76 hectares. Accordingly, it can be concluded that government policy in the field of facilitating water supply has resulted to increasing negative externality cost. In other word, water conservation policies will lead to more destruction of resources if policies are uncoordinated and resource conservation polices are not considered as agricultural supporting polices are performed.