IDEAS home Printed from https://ideas.repec.org/p/fem/femwpa/2006.144.html
   My bibliography  Save this paper

Marginal Cost Versus Average Cost Pricing with Climatic Shocks in Senegal: A Dynamic Computable General Equilibrium Model Applied to Water

Author

Listed:
  • Anne Briand

    (University of Rouen)

Abstract

The model simulates on a 20-year horizon, a first phase of increase in the water resource availability taking into account the supply policies by the Senegalese government and a second phase with hydrologic deficits due to demand evolution (demographic growth). The results show that marginal cost water pricing (with a subsidy ensuring the survival of the water production sector) makes it possible in the long term to absorb the shock of the resource shortage, GDP, investment and welfare increase. Unemployment drops and the sectors of rain rice, market gardening and drinking water distribution grow. In contrast, the current policy of average cost pricing of water leads the long-term economy in a recession with an agricultural production decrease, a strong degradation of welfare and a rise of unemployment. This result questions the basic tariff (average cost) on which block water pricing is based in Senegal.

Suggested Citation

  • 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.
  • Handle: RePEc:fem:femwpa:2006.144
    as

    Download full text from publisher

    File URL: http://www.feem.it/userfiles/attach/Publication/NDL2006/NDL2006-144.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jung, Hong-Sang & Thorbecke, Erik, 2003. "The impact of public education expenditure on human capital, growth, and poverty in Tanzania and Zambia: a general equilibrium approach," Journal of Policy Modeling, Elsevier, vol. 25(8), pages 701-725, November.
    2. François Bourguignon & William H. Branson & Jaime de Melo, 1989. "Macroeconomic Adjustment and Income Distribution: A Macro-Micro Simulation Model," OECD Development Centre Working Papers 1, OECD Publishing.
    3. Mohamed Hedi Bchir & Yvan Decreux & Jean-Louis Guerin & Sebastien Jean, 2002. "MIRAGE, un modele d'equilibre general calculable pour l'evaluation des politiques commerciales," Economie Internationale, CEPII research center, issue 89-90, pages 109-153.
    4. Decaluwe, B. & Patry, A. & Savard, L., 1999. "`When Water Is No Longer Heaven Sent: Comparative Pricing Analysis in an AGE Model," Papers 9905, Laval - Recherche en Politique Economique.
    5. Berck, Peter & Robinson, Sherman & Goldman, George E, 1990. "The use of computable general equilibrium models to assess water policies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt082465zv, Department of Agricultural & Resource Economics, UC Berkeley.
    6. Nabil Annabi & Fatou Cissé & John Cockburn & Bernard Decaluwé, 2005. "Trade Liberalisation, Growth and Poverty in Senegal: a Dynamic Microsimulation CGE Model Analysis," Working Papers 2005-07, CEPII research center.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roseta-Palma, Catarina & Monteiro, Henrique, 2008. "Pricing for Scarcity," MPRA Paper 10384, University Library of Munich, Germany.
    2. Jonas Luckmann & Dorothee Flaig & Harald Grethe & Khalid Siddig, 2016. "Modelling Sectorally Differentiated Water Prices - Water Preservation and Welfare Gains Through Price Reform?," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(7), pages 2327-2342, May.
    3. 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.

    More about this item

    Keywords

    Computable General Equilibrium Model; Dynamic; Imperfect Competition; Water; Pricing; Sub Saharan Africa;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2006.144. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (barbara racah). General contact details of provider: http://edirc.repec.org/data/feemmit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.