Western Water Inefficiency: How Prior Appropriation Laws Increase Water Consumption

As climate change intensifies, water conservation and efficiency become increasingly important. The US employs two sets of water management laws: prior appropriation and riparian. This project examines the efficacy of prior appropriation laws in allocating water usage in the predominantly arid American West. Identifying excessive water use as a negative externality, this project seeks to measure the effect of rigid prior appropriation laws on water use per capita. This project quantifies the negative externality of excess water consumption from prior appropriation laws, measured as differences in water use per capita. The analysis utilizes a panel of county-level water data from 2000 to 2015. Informed by the prevailing literature, the analysis includes controls for drought risk, temperature, types of water use, entity-fixed effects, and time-fixed effects. Results show that prior appropriation laws cause a significantly higher rate of per capita water use.