Andrew B. Ayres

Public Policy Institute of California
500 Washington Street, Suite 600
San Francisco, CA 94111
Tel: (541)-953-1018

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Institutional Affiliation: Public Policy Institute of California

NBER Working Papers and Publications

September 2019Do Property Rights Alleviate the Problem of the Commons? Evidence from California Groundwater Rights
with Kyle C. Meng, Andrew J. Plantinga: w26268
Property rights are widely prescribed for addressing overextraction of common pool resources, yet causal evidence of their effectiveness remains elusive. We develop a model of dynamic groundwater extraction to demonstrate how a spatial regression discontinuity design exploiting a spatially-incomplete property rights regime recovers a lower bound on the value of property rights. We apply this estimator to a major aquifer in water-scarce southern California and find that the introduction of ground- water property rights generated substantial net benefits, as capitalized in land values. Heterogeneity analyses suggest gains arise in part from tradeability of these rights, which enables more efficient water use.
May 2017How Transaction Costs Obstruct Collective Action: Evidence from California’s Groundwater
with Eric C. Edwards, Gary D. Libecap: w23382
Collective action to remedy the losses of open access to common-pool resources often is late and incomplete, extending rent dissipation. Examples include persistent over-exploitation of oil fields and ocean fisheries, despite general agreement that production constraints are needed. Transaction costs encountered in assigning property rights are an explanation, but analysis of their role is limited by a lack of systematic data. We examine governance institutions in California’s 445 groundwater basins using a new dataset to identify factors that influence the adoption of extraction controls. In 309 basins, institutions allow unconstrained pumping, while an additional 105 basins have weak management plans. Twenty of these basins are severely overdrafted. Meanwhile, users in 31 basins have def...

Published: Ayres, Andrew B. & Edwards, Eric C. & Libecap, Gary D., 2018. “How transaction costs obstruct collective action: The case of California's groundwater,” Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 46-65.

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