Water Security and Irrigation Investment: Evidence from a Field Experiment in Rural Pakistan

Abstract

This study examines the relationship between water security features and irrigation investment using data from a field survey with a choice experiment conducted in rural Pakistan. Our results generally support Besley’s framework on the link between property right and investment incentive with an application to irrigation, although not all aspects of water security features can significantly affect farmers’ investment in irrigation. Investment increases significantly with groundwater share, but there is insufficient evidence to support that farmers’ investment is significantly and positively affected by surface water reliability. Farmers who own land or who are located further down the watercourse tend to invest more than their peers do. Existing conditions on surface water reliability significantly affect this relationship. Overall, groundwater use dominates the decision-making of investment and the role of surface water source in securing irrigation water is relatively weak from a farmer’s perspective.