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The Value Of The High Aswan Dam To The Egyptian Economy

Author

Listed:
  • Kenneth M. Strzepek
  • Gary W. Yohe
  • Richard S.J. Tol

    (Economic and Social Research Institute, Dublin)

  • Mark Rosegrant

Abstract

The High Aswan Dam converted a variable and uncertain flow of river water into a predictable and controllable flow. We use a computable general equilibrium model of the Egyptian economy to estimate the economic impact of the High Aswan Dam. We compare the 1997 economy as it was to the 1997 economy as it would have been for 72 historical, pre-dam water flows. The steady water flow increased transport productivity, while the seasonal shift in water supply allowed for a shift towards more valuable summer crops. These static effects are worth LE 4.9 billion. Investments in transport and agriculture increased as a consequence. Assuming that Egypt is a small open economy, this is worth another LE 1.1 billion. The risk premium on the reduced variability is estimated to be LE 1.1 billion for a modest risk aversion, and perhaps LE 4.4 billion for a high risk aversion. The total gain of LE 7.1 billion equals 2.7% of GDP.

Suggested Citation

  • Kenneth M. Strzepek & Gary W. Yohe & Richard S.J. Tol & Mark Rosegrant, 2006. "The Value Of The High Aswan Dam To The Egyptian Economy," Working Papers FNU-111, Research unit Sustainability and Global Change, Hamburg University, revised Jun 2006.
    • Handle: RePEc:sgc:wpaper:111
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    References listed on IDEAS

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    More about this item

    Keywords

    Egypt; High Aswan Dam; computable general equilibrium model; risk premium; water supply;
    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
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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