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Do Water-Rich Regions Have A Comparative Advantage In Food Production? Improving The Representation Of Water For Agriculture In Economic Models


  • Faye Duchin
  • Carlos López-Morales


With growing demand for fresh water and uncertain supplies, there is an increasing concern about future water scarcity. Since most freshwater withdrawals are for agriculture, reliance on water embodied in imported food (trade in ‘virtual water’) is a possible strategy to provide food to water-stressed regions while conserving their scarce supply for other purposes. To evaluate this proposition, we extend a model of interregional trade by (1) defining endowments of water that cannot be exceeded, (2) allowing simultaneous operation of rainfed and irrigated agriculture, and (3) distinguishing sub-regional endowments within a larger economic region. An application to the Mexican economy compares region-specific water abundance with economic comparative advantage under alternative scenarios. We conclude that the water-rich regions of Mexico are relatively high-cost producers of food and that they do not pick up the slack even when the lowest-cost Mexican regions are constrained by binding water constraints.

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  • Faye Duchin & Carlos López-Morales, 2012. "Do Water-Rich Regions Have A Comparative Advantage In Food Production? Improving The Representation Of Water For Agriculture In Economic Models," Economic Systems Research, Taylor & Francis Journals, vol. 24(4), pages 371-389, July.
  • Handle: RePEc:taf:ecsysr:v:24:y:2012:i:4:p:371-389 DOI: 10.1080/09535314.2012.714746

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    References listed on IDEAS

    1. Love, Inessa & Preve, Lorenzo A. & Sarria-Allende, Virginia, 2007. "Trade credit and bank credit: Evidence from recent financial crises," Journal of Financial Economics, Elsevier, vol. 83(2), pages 453-469, February.
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    Cited by:

    1. Roxana Juliá & Faye Duchin, 2013. "Land Use Change and Global Adaptations to Climate Change," Sustainability, MDPI, Open Access Journal, vol. 5(12), pages 1-18, December.
    2. repec:spr:endesu:v:19:y:2017:i:3:d:10.1007_s10668-016-9770-2 is not listed on IDEAS
    3. repec:eee:eneeco:v:64:y:2017:i:c:p:13-23 is not listed on IDEAS
    4. Jordan Hristov & Aleksandra Martinovska-Stojcheska & Yves Surry, 2016. "The Economic Role of Water in FYR Macedonia: An Input–Output Analysis and Implications for the Western Balkan Countries," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(04), pages 1-37, December.

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