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A Tale of Two Roads: Groundwater Depletion in the North China Plain

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Ujjayant Chakravorty discusses the effect of the arrival of two new national highways on ground water levels in a small agricultural county in the North China Plain – a region that produces most of the nation’s food grains.

Image courtesy of interviewee. April 24, 2024

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This video video discusses a study focused on the impact of infrastructure, specifically roads built in China over the past 20-25 years, on resource depletion and agricultural practices. Historically, economic literature has concentrated on the positive aspects of infrastructure, such as improved communication and trade. However, recent concerns about sustainable development prompt a need to also consider the negative consequences on natural resources.

The study utilizes data from tube wells in a well-known county in China, using a difference-in-difference analysis to examine how proximity to roads influenced farming practices and resource depletion. Roads facilitated a transition from traditional crops like corn and wheat to commercial crops like melons, which can be rapidly shipped to larger urban areas.

While these developments have economic benefits, the research found that farms closer to the highways experienced significantly higher water depletion—up to six times greater than average rates in the region—due to the increased irrigation demands of these new crops. The study aims to illustrate the dual nature of infrastructure development: although roads can promote economic growth, they also pose challenges for sustainability, such as increased resource depletion.

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X-TIMESTAMP-MAP:LOCAL=00:00:00.000,MPEGTS=900000

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Context is mainly sort of to study the effect

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of infrastructure on resource depletion.

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You know, how does building

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or using of infrastructure negatively impact,

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you know, the stock of natural resources?

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There's a lot of literature on the positive role

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of infrastructure on economic economic development.

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For example, you know, roads

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and bridges lead to increased communication, trade movement

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of goods of people, et cetera.

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So economics has usually historically dealt

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with the positive impacts.

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So there's a large literature on that topic,

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but recently, you know, as you know,

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there have been concerns about sustainable

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development, for example.

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And infrastructure projects have

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to be weighed not only in terms of the benefits they

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produce, but also potentially the costs they might,

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create in terms of long-term economic development

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and sustainability.

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So that's why this study was taken

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or undertaken with respect to that in mind, how can you use

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these roads that were built in China to

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look at the impact on resource depletion in the long run?

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China in the last 20, 25 years has

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undertaken a massive road building, program,

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and they have done it at lightning speed relative

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to other countries in the world.

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They, you know, take, property, they, you know,

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convert private property into, leases

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or other forms of institutional arrangements such that

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roads, et cetera, can be built on that land.

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This happens in, you know,

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in a very short period of period of time.

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And then, so these roads were essentially built

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to connect all of these state capitals

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and the national capital,

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and they were done mostly from the late nineties

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to the early two thousands.

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We do a difference in difference technique,

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which is popular in economics.

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And basically what we do is we compare.

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So we'd assume that the roads were built exogenously,

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meaning these roads connected, you know, large cities in the

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sort of east and west of the country.

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They run literally 4,000 kilometers.

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One of the roads does, and the other one is not

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that long, but quite long.

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And they're essentially straight line.

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So one, you know, question

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or possible criticism could be, look, maybe the planners

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aligned or placed these roads to go through certain areas.

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So we address that issue by actually looking at

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hypothetical straight line highway.

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So we said, look, if there is a concern about endogeneity in

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the sense that the placement of roads was not exogenous

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to the study we are doing,

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let's consider hypothetical straight line virtual highways,

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and all our results go through when we do that.

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So we assume that the roads were placed exogenously,

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and that's a reasonable assumption.

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And then we said, let's compare the farms that are close

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to the highway and the farms

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that are farther away from the highway and compare them

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before and after the highways were built.

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So we compare a whole range of, metrics,

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outcome metrics, for example, eels, the type of,

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you know, crops that are grown, the amount of water

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that is used, et cetera.

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And then not only did we get this data that I described

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to you from the local bureaucratic, you know, offices,

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we also conducted our own primary surveys in this region

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in the year 2014.

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And this is with the help of our local collaborator in,

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in China, who's a professor in one of the universities.

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The results are actually quite interesting.

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We find that, the,

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the roads actually allowed farming to go

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through some transformation,

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and especially those farms that were located closer

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to these highways.

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Why? Because from there you can ship your products really

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fast over the highway.

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So we also found that, you know, in these farms,

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there was a transition away from corn

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and wheat, which were traditional staple crops, mostly

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for the local market, mostly for sustainments

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of the family itself to commercial crops like, melons,

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which could then be easily shipped away from the highway.

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In fact, there are some videos on YouTube from the,

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leaders, you know, in this area.

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And they are sort of boasting about the fact

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that now from Lan cao, you can ship melons six hours away

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into areas, into larger cities where there's big demand.

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So before it was not possible because of the roads.

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Now the other issue, of course, that we study is, look,

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this was the benefit of these roads, right, in terms

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of being able to induce structural transformation

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closer to the roads.

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But the other side of that is, of course,

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these crops often use much more water than

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the traditional crops.

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So that's what we were focusing on in our study.

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Now, all this happened in the plots that are closer

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to the highway, not necessarily in the

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plots farther from the highway.

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So if you were like 10 kilometers farther from the highway,

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you were not able

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to ship your perishable crops so quickly.

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So the transition was much less away from the highway

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relative to the plots that are right next to it.

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So, you know, what we found was that depletion

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was about five or six times higher, closer to the highway

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Relative to sort of average depletion

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in the North China plane.

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Now let me tell you, north China plane uses a lot of,

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you know, irrigation water.

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So depletion rates are quite high,

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but in this area, especially close to the roads,

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the depletion was much higher.

Infrastructure's Impact on Resource Depletion

00:00:00 - Context is mainly sort of to study the effect of infrastructure on resource depletion. You know, how does building or using of infrastructure negatively impact, you know, the stock of natural resources? There's a lot of literature on the positive role of infrastructure on economic economic development. For example, you know, roads and bridges lead to increased communication, trade movement
00:00:34 - So economics has usually historically dealt with the positive impacts. So there's a large literature on that topic, but recently, you know, as you know, there have been concerns about sustainable development, for example. And infrastructure projects have to be weighed not only in terms of the benefits they produce, but also potentially the costs they might, create in terms of long-term economic development
00:01:04 - So that's why this study was taken or undertaken with respect to that in mind, how can you use these roads that were built in China to look at the impact on resource depletion in the long run? China in the last 20, 25 years has undertaken a massive road building, program, and they have done it at lightning speed relative to other countries in the world. They, you know, take, property, they, you know,
00:01:39 - or other forms of institutional arrangements such that roads, et cetera, can be built on that land. This happens in, you know, in a very short period of period of time. And then, so these roads were essentially built to connect all of these state capitals and the national capital, and they were done mostly from the late nineties to the early two thousands. We do a difference in difference technique,
00:02:08 - And basically what we do is we compare. So we'd assume that the roads were built exogenously, meaning these roads connected, you know, large cities in the sort of east and west of the country. They run literally 4,000 kilometers. One of the roads does, and the other one is not that long, but quite long. And they're essentially straight line. So one, you know, question or possible criticism could be, look, maybe the planners
00:02:44 - So we address that issue by actually looking at hypothetical straight line highway. So we said, look, if there is a concern about endogeneity in the sense that the placement of roads was not exogenous to the study we are doing, let's consider hypothetical straight line virtual highways, and all our results go through when we do that. So we assume that the roads were placed exogenously, and that's a reasonable assumption.

Impact of Highways on Agricultural Transformation

00:03:15 - to the highway and the farms that are farther away from the highway and compare them before and after the highways were built. So we compare a whole range of, metrics, outcome metrics, for example, eels, the type of, you know, crops that are grown, the amount of water that is used, et cetera. And then not only did we get this data that I described
00:03:45 - we also conducted our own primary surveys in this region in the year 2014. And this is with the help of our local collaborator in, in China, who's a professor in one of the universities. The results are actually quite interesting. We find that, the, the roads actually allowed farming to go through some transformation, and especially those farms that were located closer
00:04:13 - Why? Because from there you can ship your products really fast over the highway. So we also found that, you know, in these farms, there was a transition away from corn and wheat, which were traditional staple crops, mostly for the local market, mostly for sustainments of the family itself to commercial crops like, melons, which could then be easily shipped away from the highway.
00:04:46 - leaders, you know, in this area. And they are sort of boasting about the fact that now from Lan cao, you can ship melons six hours away into areas, into larger cities where there's big demand. So before it was not possible because of the roads. Now the other issue, of course, that we study is, look, this was the benefit of these roads, right, in terms of being able to induce structural transformation
00:05:14 - But the other side of that is, of course, these crops often use much more water than the traditional crops. So that's what we were focusing on in our study. Now, all this happened in the plots that are closer to the highway, not necessarily in the plots farther from the highway. So if you were like 10 kilometers farther from the highway, you were not able to ship your perishable crops so quickly. So the transition was much less away from the highway
00:06:11 - So, you know, what we found was that depletion was about five or six times higher, closer to the highway Relative to sort of average depletion in the North China plane. Now let me tell you, north China plane uses a lot of, you know, irrigation water. So depletion rates are quite high, but in this area, especially close to the roads, the depletion was much higher.

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