Irrigation technology adoption and its implication for water conservation in the Texas High Plains: a real options approach
研究采用实物期权方法分析德克萨斯州高地平原棉花种植中低能耗精准灌溉系统的进入与退出阈值，发现该系统仅在棉花价格高于1.59美元/千克时盈利，且现有灌溉系统用户不易退出，建议当地重点说服农民更换旧系统以节水。
Abstract Water shortage has been a significant issue for several decades in the Texas High Plains. Agriculture has been identified as the main activity contributing to this shortage. To address this issue, many efforts have been focused on the possible adoption of sophisticated irrigation systems with high levels of water application efficiency. In this study, the entry and exit thresholds for the low‐energy precision application (LEPA) system are analyzed simultaneously in cotton farming in the Texas High Plains using a real options approach. The results show that the LEPA system is profitable only when cotton price is set above $1.59/kg. The exit (entry) threshold is consistently low (high) over a range of values for parameter changes including investment cost, exit cost, variable cost, risk‐adjusted discount rate, and volatility rate, so it is unlikely that farmers with irrigation systems in place would leave them easily. This implies that to attain the goal of saving water, Lubbock County needs to focus on convincing current farmers to replace old irrigation systems with new ones.