Evaluating Trade-offs Between Irrigation Profit and Streamflow Depletion Using a Hydro-Economic Model

Boyao Tian , Andrea Brookfield, Margaret Insley

Groundwater overexploitation can reduce flows in connected rivers through streamflow depletion, which threatens ecosystems and downstream users who often rely on these flows for their economic wellbeing. Quantifying groundwater-surface water interactions and their economic trade-offs remains challenging for sustainable water management. This study integrates analytical groundwater and streamflow depletion methods with a farm-level hydro-economic model to evaluate the hydrologic and economic effects of irrigation groundwater pumping illustrated using example applications in confined and unconfined aquifers. The model separates the effect on land value of aquifer storage, streamflow depletion, and direct surface water use, allowing a clearer understanding of how each water source affects economic outcomes. Results from the simulated aquifers show that confined aquifers experience faster and larger streamflow depletion, while unconfined systems exhibit slower and smaller depletion. Distance to the stream and pumping rates are key determinants of depletion, shaping both its timing and magnitude, and they also have distinct effects on land values. The marginal economic value of streamflow depletion is consistently low or negative, suggesting that the water gained through depletion contributes minimally to overall economic returns. These findings highlight the importance of identifying water source contributions, well placement, and regulatory constraints when designing irrigation strategies. Through integrated marginal value and risk analyses, this study offers practical insights for policymakers and water managers to design irrigation strategies that balance economic returns with long-term water resource sustainability.