Seminar Over-drilling: Externalities and Social Cost of Electricity Subsidies in South India Macroeconomics Seminar Add to calendar 2021-09-24 15:30 2021-09-24 16:45 Europe/Rome Over-drilling: Externalities and Social Cost of Electricity Subsidies in South India Seminar Room 3rd Floor Villa La Fonte YYYY-MM-DD Print Share: Share on Facebook Share on BlueSky Share on X Share on LinkedIn Send by email Scheduled dates Sep 24 2021 15:30 - 16:45 CEST Seminar Room 3rd Floor, Villa La Fonte Organised by Department of Economics In this seminar, ECO Professor Jesus Bueren will present the paper "Over-drilling: Local Externalities and the Social Cost of Electricity Subsidies in South India." Borewells have proliferated across India in recent years, partly in response to massive electricity subsidies that encourage groundwater pumping. This paper estimates a dynamic structural model of well-drilling using panel data collected in two districts of southern India. Due to well interference, a highly localised common property externality, farmers interact strategically across a network of adjacent agricultural plots. We use the model estimates to quantify the social costs of the current policy of free (but rationed) electricity to agriculture.We also assess how local externalities exacerbate these social costs and how long it takes for the groundwater economy to transition to a new steady state under the counterfactual at charge for electricity.Due to limited spaces for COVID restrictions, participation on site will be allowed on a first-come, first-served basis. The event will also be live-streamed via zoom. Participants will receive the zoom link once registered.