The relative economic merits of alternative water right systems

How natural resources are measured and bounded within a property right system can influence their development productivity. This is especially true for surface water given its fluid, fungible, stochastic nature. Two quantifications have emerged: The prior appropriation doctrine provides absolute quantities to allocated based on first use while proportional rights distribute set percentage of total owners. While theoretical differences been identified, empirical tests scarce due the endogenous choice rights. I identify utilize experiment where acequias (Hispanic-rooted irrigation ditches) developed in Territorial New Mexico later divided by formation Colorado, exogenously compelling that subset be subject priority those continue practice division. Drawing broad compilation archival, administrative, satellite, hydrological, survey data, find curtail investment irrigators, but marginal product generally lower under system. research advances our understanding how distinct systems affect resource use. results guide stakeholders devising or reforming resource, particularly ones with flows.