Centre for Development Economics
Department of Economics
Delhi School of Economics
ANNOUNCE A SEMINAR
Adaptation for Hire
by
Shresth Garg
(University of Pennsylvania)
(Thursday, September 10, 2026 at 3:00 PM)
Venue: Amex
Abstract:-
Rainfall shocks are an important source of risk in agriculture. Groundwater irrigation can mitigate these shocks but it requires investment in irrigation infrastructure, which is expensive, and many farms are too small to justify buying it. In our data, ownership rises from 35 percent among marginal farmers to 67 percent among large farmers. Small farmers instead rely on rental markets for water. Rental expands access but raises the cost of irrigation. In a dry year, renters’ irrigation spending rises by Rs1,030 per hectare, twice the increase for owners. We develop a model of groundwater markets and use it to study the impact of a subsidy for well ownership. We find that the subsidy is poorly targeted because most recipients already access groundwater through rental markets. For these farmers, the subsidy replaces rented irrigation services with owned infrastructure rather than expanding access.