Valuing Cost of Groundwater Overexploitation: Evidences from Apulian Land Values

An assessment of economic value of groundwater resources in the context of agricultural production is carried out, with a focus on the challenges posed by both qualitative and quantitative issues. The research draws upon data collected from a comprehensive survey to 274 farmers in hot-spot irrigated area of Apulia region. Hedonic analysis is performed, utilizing various at-tributes of farmland as explanatory variables. Land attributes include, among others, the type of access to irrigation services (collective vs. self-supplied), salinity and quantity-related issues of water services. In pursuit of a nuanced understanding of the heterogeneous responses of farmers to groundwater-related issues, a Finite Mixture Model (FMM) is implemented. Farmland where groundwater over-exploitation is already detected reports minor economic value. The findings of this study provide valuable insights for policymakers seeking to enhance groundwater sustainability.