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The Effect of Water Rights Trading Policy on Water Resource Utilization Efficiency: Evidence from a Quasi-Natural Experiment in China

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  • Shaojian Chen

    (Northwest Institute of Historical Environment and Socio-Economic Development, Shaanxi Normal University, Xi’an 710119, China)

  • Yuanyuan Cao

    (Northwest Institute of Historical Environment and Socio-Economic Development, Shaanxi Normal University, Xi’an 710119, China)

  • Jun Li

    (Northwest Institute of Historical Environment and Socio-Economic Development, Shaanxi Normal University, Xi’an 710119, China)

Abstract

Water shortage has become a serious problem in the world, and low water efficiency is the key to industrial and agricultural production and sustainable economic development. Based on the data of 30 provinces (municipalities) in China from 2010 to 2017, this study builds a DEA model based on the hybrid network structure of water systems to measure water resource utilization efficiency and uses a difference-in-differences (DID) model to examine the effects of the water rights trading policy on water resource utilization efficiency. We find that the water rights trading policy can significantly promote the total water efficiency of the water resources system and the initial water use efficiency, and after a series of robustness tests, the result is still valid. Further analysis indicates that the policy effect changes with the adjustment of the industrial and agricultural water use structure. Moreover, the dynamic impact of water rights trading policy on water resource utilization efficiency is still significant. This study provides macroscopic evidence for evaluating the effects of China’s water rights trading policy and offers new ideas and experiences for improving China’s water resource utilization efficiency.

Suggested Citation

  • Shaojian Chen & Yuanyuan Cao & Jun Li, 2021. "The Effect of Water Rights Trading Policy on Water Resource Utilization Efficiency: Evidence from a Quasi-Natural Experiment in China," Sustainability, MDPI, vol. 13(9), pages 1-17, May.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:9:p:5281-:d:550932
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    2. Wenjing Wang & Xin Zhao & Junwei Xu & Shenjie Zhou, 2025. "Drivers, performance evaluation and influencing factors of water resources utilisation—based on the theory of sustainable development," Natural Resources Forum, Blackwell Publishing, vol. 49(3), pages 3164-3196, August.
    3. Liying Gong & Xuanxuan Zhao & Guangcan Zhu, 2022. "Pathways of Nitrogen and Phosphorus Utilization and Removal from Cyanobacteria Wastewater by Combining Constructed Wetlands with Aerobic Reactors," Sustainability, MDPI, vol. 14(14), pages 1-16, July.
    4. Yan Liu & Chao Shang, 2022. "Application of Blockchain Technology in Agricultural Water Rights Trade Management," Sustainability, MDPI, vol. 14(12), pages 1-10, June.
    5. Yonghui Wang & Jin Li & Kaixuan Qian & Mao Ye, 2023. "Response of Plant Species Diversity to Flood Irrigation in the Tarim River Basin, Northwest China," Sustainability, MDPI, vol. 15(2), pages 1-14, January.

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