The Dynamic Impacts of Pricing Groundwater
利用一项自然实验，研究地下水价格大幅持续上涨后，农场用水量在五年间的动态变化，发现节水效果随时间翻倍，忽视动态会错估需求弹性并导致效率损失。
This paper evaluates own-price dynamics in taxing environmental externalities. We exploit a natural experiment that exposed some firms to a large and persistent price increase for groundwater, a setting characterized by incomplete markets. Using five years of post-treatment data on farm-level water use, we find that water conservation doubles between the first and fifth year of the tax. Failure to account for dynamics in policies designed to manage groundwater will mischaracterize the price elasticity of demand and introduce efficiency costs.