Date of Completion


Embargo Period



Rural Development, Water, Credits Trading, Dynamic, Simulation, Ownership, Public Water Systems, Violations, SDWA

Major Advisor

Stephen K. Swallow

Associate Advisor

Farhed A. Shah

Associate Advisor

Kathleen Segerson

Associate Advisor

Pengfei Liu

Field of Study

Agricultural and Resource Economics


Doctor of Philosophy

Open Access

Campus Access


The purpose of this study is to better understand and handle threats to both the quantity and the quality of our water resources. On one hand, land development in rural areas creates impervious surface areas that degrade the capability of undeveloped land to supply water to residents in the local watershed. Rural land development also introduces new water demands, thus intensifying the competition for local water resources among municipal, agricultural and environmental sectors. On the other hand, ownership types of Public Water Systems (PWSs), public or private, might lead to systematic differences in incentives and operation practice of PWSs in providing drinking water to local communities. As a result, privately owned PWSs might supply water of lower quality than their pubic counterparts, if they are profit-oriented and care relatively less about public health than publicly-owned PWSs. In this dissertation, I propose innovation and rethinking to the current policies that cannot well address these threats.

In chapter one and two, I apply the cap-and-trade concept and propose the Baseflow Supply Capability Credits (BSCCs) trading policy, which tries to balance rural land development and local water sustainability. I set up theoretical frameworks and perform numerical simulations to assess the feasibility of the policy. I show that the BSCCs trading scheme can not only achieve the socially optimal development or conservation pattern for land allocation compared to full built-out, but also can generate a substantial amount of revenue for landowners with land of greater capability of supplying water. In Chapter three, I study the relationship between the ownership type of PWSs and their violations of the National Primary Drinking Water Regulations (NPDWR). With rigorous econometric methods applied to the U.S. Environmental Protection Agency’s Safe Drinking Water Information System (SDWIA), I find that publicly-owned PWSs commit significantly more Maximum Contamination Level (MCL), Treatment Technique (TT), and Health-related violations but fewer Monitor and Reporting (MR) violations than privately owned PWSs. The results also imply that PWSs’ water supply quality depends crucially on location-specific regulations and local economic conditions.