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`When Water Is No Longer Heaven Sent: Comparative Pricing Analysis in an AGE Model

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Author Info

  • Decaluwe, B.
  • Patry, A.
  • Savard, L.

Abstract

In this paper we present a applied general equilibrium model with special features that allows for comparative analysis of different pricing scheme. We look at Boiteux-Ramsey Pricing, Marginal Cost Pricing as well as an arbitrary water pricing increase for the agriculture sectors. A standard AGE was adapted by explicitly modeling water production with its different technologies, water demand by different users also needed to be refined since they are generally modeled with fixed coefficient with no substitution allowed. Results show that the choice of applying one policy over another can rely on the water management authorities (or government)objectives. If considering economic efficiency and water conservation the Boiteux-Ramsey pricing seems to be the best alternative. Moreover, we show that BRP become more clearly advantageous vs MCP the more rigid (small capacities to substitute water for other inputs) the economy's agents

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Bibliographic Info

Paper provided by Laval - Recherche en Politique Economique in its series Papers with number 9905.

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Length: 39 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:fth:lavape:9905

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Keywords: WATER ; TAXES ; ECONOMIC MODELS ; ECONOMIC EQUILIBRIUM ; PRICING;

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Cited by:
  1. Alvaro Calzadilla & Katrin Rehdanz & Richard S.J. Tol, 2008. "The Eonomic Impact Of More Sustainable Water Use In Agriculture: A Computable General Equilibrium Analysis," Working Papers FNU-169, Research unit Sustainability and Global Change, Hamburg University, revised Dec 2008.
  2. Roberto Ponce & Francesco Bosello & Carlo Giupponi, 2012. "Integrating Water Resources into Computable General Equilibrium Models - A Survey," Working Papers 2012.57, Fondazione Eni Enrico Mattei.
  3. Rehdanz, Katrin & Berrittella, Maria & S.J. Tol, Richard & Zhang, Jian, 2008. "The Impact of Trade Liberalization on Water Use: A Computable General Equilibrium Analysis," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 631-655.
  4. Strzepek, Kenneth M. & Yohe, Gary W. & Tol, Richard S.J. & Rosegrant, Mark W., 2008. "The value of the high Aswan Dam to the Egyptian economy," Ecological Economics, Elsevier, vol. 66(1), pages 117-126, May.
  5. Maria Berrittella & Katrin Rehdanz & Richard S.J. Tol, 2006. "The Economic Impact of the South-North Water Transfer Project in China: A Computable General Equilibrium Analysis," Working Papers 2006.154, Fondazione Eni Enrico Mattei.
  6. Pouchkarev, Igor & Spronk, Jaap & Trinidad Segovia, Juan E., 2006. "Empirical Insights on the Heterogeneity of the Spanish Stock Market/Un Análisis Empírico De La Heterogeneidad Del Mercado De Capitales Español," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 24, pages 1091-1106, Diciembre.
  7. Anne Briand, 2008. "Les tarifications au coût marginal versus coût moyen face à des chocs climatiques au Sénégal : un modèle dynamique d’équilibre général calculable appliqué à l’eau," Économie et Prévision, Programme National Persée, vol. 185(4), pages 103-122.
  8. Anne Briand, 2006. "Marginal Cost Versus Average Cost Pricing with Climatic Shocks in Senegal: A Dynamic Computable General Equilibrium Model Applied to Water," Working Papers 2006.144, Fondazione Eni Enrico Mattei.
  9. Alvaro Calzadilla & Katrin Rehdanz & Richard S.J. Tol, 2008. "Water scarcity and the impact of improved irrigation management: A CGE analysis," Kiel Working Papers 1436, Kiel Institute for the World Economy.
  10. M. Alejandro Cardenete & G.J.D. Hewings & E. Velázquez, 2005. "Precio del agua y relocalización del recurso en la economía andaluza. Una aproximación desde un modelo de equilibrio general aplicado," Economic Working Papers at Centro de Estudios Andaluces E2005/22, Centro de Estudios Andaluces.
  11. Maria Berrittella & Katrin Rehdanz & Roberto Roson & Richard S.J. Tol, 2008. "The Economic Impact Water Taxes: a Computable General Equilibrium Analysis with an International Data Set," Working Papers 2008_05, Department of Economics, University of Venice "Ca' Foscari".
  12. Maria Berrittella & Katrin Rehdanz & Roberto Roson & Richard S.J. Tol, 2006. "The Economic Impact Of Water Pricing: A Computable General Equilibrium Analysis," Working Papers FNU-96, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2006.
  13. Maria Berrittella & Katrin Rehdanz & Arjen Y. Hoekstra & Roberto Roson & Richard S.J. Tol, 2006. "The Economic Impact Of Restricted Water Supply: A Computable General Equilibrium Analysis," Working Papers FNU-93, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2006.
  14. Esther Velázquez & M. Alejandro Cardenete & Geoffrey J.D. Hewings, 2007. "Water price and water reallocation in Andalusia. A computable general equilibrium approach," Working Papers 07.04, Universidad Pablo de Olavide, Department of Economics.

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