In early 1997, the Texas Edwards Aquifer Authority implemented a pilot Irri
gation Suspension Program with the objectives of increasing springflow and
providing relief to municipalities during drought. Irrigators were paid an
average of $234 per acre to suspend water use, a price higher than regional
land rental rates. Auction theory and program implementation details sugge
st that the program implementation partially caused inflated bids. The irri
gation Suspension Program is also compared to two alternative programs: (1)
subsidizing more efficient irrigation technology and (2) buying land. The
irrigation suspension is found to be more cost-effective relative to subsid
izing improved irrigation efficiency because it can be put in place only wh
en aquifer levels are low. Land purchase is a cheaper alternative if the bi
d levels remain at the levels observed.