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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Paper provided by Laval - Recherche en Politique Economique in its series Papers with number
9905.
Find related papers by JEL classification: C68 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Computable General Equilibrium Models Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
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