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: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2006-144.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    4. 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.
    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. 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.
    7. Decaluwe, Bernard & Patry, André & Savard, Luc, 1997. "Quand l'eau n'est plus un don du ciel: un MEGC appliqué au Maroc," Cahiers de recherche 9716, Université Laval - Département d'économique.
    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. 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.
    2. 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," Post-Print hal-02430398, HAL.
    3. Van der Mensbrugghe, Dominique & Medvedev, Denis, 2010. "Climate change in Latin America: impacts and mitigation policy options," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2590, September.
    4. Roseta-Palma, Catarina & Monteiro, Henrique, 2008. "Pricing for Scarcity," MPRA Paper 10384, University Library of Munich, Germany.
    5. Fuente, David, 2019. "The design and evaluation of water tariffs: A systematic review," Utilities Policy, Elsevier, vol. 61(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Briand, Anne, 2006. "Marginal Cost Versus Average Cost Pricing with Climatic Shocks in Senegal: Dynamic Computable General Equilibrium Model Applied to Water," Climate Change Modelling and Policy Working Papers 12028, Fondazione Eni Enrico Mattei (FEEM).
    2. 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.
    3. Ferrari, Emanuele & Mueller, Marc & Mellado, Aida Gonzalez, 2010. "Using Macro Indicators for Consistent CGE Baselines," Conference papers 331987, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Boureima Sawadogo, 2022. "Drought Impacts on the Crop Sector and Adaptation Options in Burkina Faso: A Gender-Focused Computable General Equilibrium Analysis," Sustainability, MDPI, vol. 14(23), pages 1-22, November.
    5. Elena G. Irwin & Andrew M. Isserman & Maureen Kilkenny & Mark D. Partridge, 2010. "A Century of Research on Rural Development and Regional Issues," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(2), pages 522-553.
    6. Harald Fadinger & Pablo Fleiss, 2011. "Trade and Sectoral Productivity," Economic Journal, Royal Economic Society, vol. 121(555), pages 958-989, September.
    7. André Lemelin, 2008. "Trade and the External Wealth of Nations," Cahiers de recherche 0814, CIRPEE.
    8. Nabil Annabi & Fatou Cissé & John Cockburn & Bernard Decaluwé, 2005. "Trade Liberalisation, Growth and Poverty in Senegal: a Dynamic Microsimulation CGE Model Analysis," Cahiers de recherche 0512, CIRPEE.
    9. Nabil Annabi & H. Khondker Bazlul & Selim Raihan & John Cockburn & Bernard Decaluwe, 2005. "Implications of WTO Agreements and Domestic Trade Policy Reforms for Poverty in Bangladesh: Short vs. Long Run," Working Papers MPIA 2005-02, PEP-MPIA.
    10. Mabugu, Ramos & Chitiga, Margaret, 2007. "South Africa Trade Liberalization and Poverty in a Dynamic Microsimulation CGE Model," Conference papers 331607, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Agenor, Pierre-Richard & Izquierdo, Alejandro & Fofack, Hippolyte, 2003. "The integrated macroeconomic model for poverty analysis : a quantitative macroeconomic framework for the analysis of poverty reduction strategies," Policy Research Working Paper Series 3092, The World Bank.
    12. Ahmed, Saira & Ahmed, Vaqar & Abbas, Ahsan & O' Donoghue, Cathal, 2010. "Global Financial Crisis, MDGs and Choices for Pakistan’s Inclusive Development," Conference papers 331971, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    13. Giordano, Paolo & Watanuki, Masakazu, 2012. "A Global Carbon Tax on Climate Change: Policy Implications for Latin America," Conference papers 332251, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    14. Anne Briand, 2004. "Comparative water pricing analysis: Duality formal-informal in a CGE model for Senegal," Post-Print hal-02430439, HAL.
    15. Koopman, Jason & Kuik, Onno & Tol, Richard & Van Der Vat, Marnix & Hunink, Joachim & Brouwer, Roy, 2017. "The economic impact of irrigation water scarcity from climate change: A CGE analysis distinguishing between surface and ground water," Conference papers 332884, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    16. Durán Lima, José E. & Finot, Alfonso & LaFleur, Marcelo, 2011. "Analysis of the effects of trade opening on household welfare: an application to Chile 1999-2006," Conference papers 332041, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    17. Al-Riffai, Perrihan & Breisinger, Clemens & Mondal, Md. Hossain Alam & Ringler, Claudia & Wiebelt, Manfred & Zhu, Tingju, 2017. "Linking the economics of water, energy, and food: A nexus modeling approach," MENA working papers 4, International Food Policy Research Institute (IFPRI).
    18. Ignacio Cazcarro & Rosa Duarte & Julio Sanchez Choliz & Cristina Sarasa, 2011. "Water Rates And The Responsibilities Of Direct, Indirect And End-Users In Spain," Economic Systems Research, Taylor & Francis Journals, vol. 23(4), pages 409-430, August.
    19. Jason F.L. Koopman & Onno Kuik & Richard S.J. Tol & Roy Brouwer, 2015. "Water Scarcity From Climate Change And Adaptation Response In An International River Basin Context," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 1-22.
    20. Lakatos, Csilla & Walmsley, Terrie, 2012. "Investment creation and diversion effects of the ASEAN–China free trade agreement," Economic Modelling, Elsevier, vol. 29(3), pages 766-779.

    More about this item

    Keywords

    Computable General Equilibrium Model; Dynamic; Imperfect Competition; Water; Pricing; Sub Saharan Africa;
    All these keywords.

    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.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alberto Prina Cerai The email address of this maintainer does not seem to be valid anymore. Please ask Alberto Prina Cerai to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/feemmit.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.