The Myth of Owens Valley

Abstract

In current discussions of western water policy, the early-20th century water deal between Los Angeles and landholders in Owens Valley, Calif., plays a prominent and decidedly negative role. It is used as a metaphor by opponents of water reallocations to demonstrate all that can go wrong with water markets. The allegations are that Owens Valley water was stolen from farmers by a rapacious Los Angeles and, once it was shipped out of the valley through the Los Angeles Aqueduct, the agricultural economy was ruined and the valley was left a wasteland. Unfortunately for the development of water markets and the smooth reallocation of water, the story is wrong. The water was neither stolen nor was the farm economy left in ruins.

Keywords: Owens Valley, water policy, water deal, water reallocation, water markets, Los Angeles Aqueduct, agricultural economy, farm economy

JEL Classification: Q15, Q32