IDEAS home Printed from https://ideas.repec.org/a/eee/agiwat/v228y2020ics0378377419304342.html
   My bibliography  Save this article

Water pricing and the value-add of irrigation water in Vietnam: Insights from a crop choice model fitted to a national household survey

Author

Listed:
  • Chu, Long
  • Grafton, R.Quentin

Abstract

Vietnam is one of several countries that suffer from climate change and is encountering increased frequency and severity of droughts. Its climate risks have led to concerns about water security, prompting policymakers to assess the value-add of water in irrigation. Here, we measure the value-add of irrigation water for non-compulsory food crops in Vietnam by formalising a crop choice model and fit it to data from a national household survey. Our results indicate that irrigator profits would fall, on average, by 0.56 US$ (2016 value) if water diverted for irrigation were reduced by one cubic meter per irrigator. We also find that some 16% of surveyed irrigators could reduce the water they divert for irrigation without reducing their profits. As a response to water scarcity, effective water pricing could reduce irrigation water extractions by around 84% while the average profit per farmer would be reduced by some 17%. Our findings highlight the importance of water pricing as a possible policy option and show that setting an appropriate volumetric price for irrigation water extractions offers the possibility of welfare-improving water reallocations.

Suggested Citation

  • Chu, Long & Grafton, R.Quentin, 2020. "Water pricing and the value-add of irrigation water in Vietnam: Insights from a crop choice model fitted to a national household survey," Agricultural Water Management, Elsevier, vol. 228(C).
    • Handle: RePEc:eee:agiwat:v:228:y:2020:i:c:s0378377419304342
    DOI: 10.1016/j.agwat.2019.105881
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378377419304342
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.agwat.2019.105881?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. repec:bla:ecorec:v:91:y:2015:i::p:109-123 is not listed on IDEAS
    2. Truong Duc Toan & Suzanne O’Keefe & Lin Crase, 2016. "Farmer heterogeneity and water pricing reform: a case study from Vietnam," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 32(6), pages 961-977, November.
    3. Abel Brodeur & Mathias Lé & Marc Sangnier & Yanos Zylberberg, 2016. "Star Wars: The Empirics Strike Back," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 1-32, January.
    4. Zhang, Lei & Heerink, Nico & Dries, Liesbeth & Shi, Xiaoping, 2013. "Water users associations and irrigation water productivity in northern China," Ecological Economics, Elsevier, vol. 95(C), pages 128-136.
    5. Alec Zuo & Sarah Ann Wheeler & Peter Boxall & W. L. (Vic) Adamowicz & Darla Hatton MacDonald, 2015. "Identifying Water Prices at which Australian Farmers Will Exit Irrigation: Results of a Stated Preference Survey," The Economic Record, The Economic Society of Australia, vol. 91(S1), pages 109-123, June.
    6. Steven Renzetti, 2009. "Wave of the Future: The Case for Smarter Water," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 281, February.
    7. James E. T. Moncur & Richard L. Pollock, 1988. "Scarcity Rents for Water: A Valuation and Pricing Model," Land Economics, University of Wisconsin Press, vol. 64(1), pages 62-72.
    8. R. Quentin Grafton & Gary Libecap & Samuel McGlennon & Clay Landry & Bob O'Brien, 2011. "An Integrated Assessment of Water Markets: A Cross-Country Comparison," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(2), pages 219-239, Summer.
    9. J. S. Famiglietti, 2014. "The global groundwater crisis," Nature Climate Change, Nature, vol. 4(11), pages 945-948, November.
    10. Yohannes, Degol Fissahaye & Ritsema, C.J. & Solomon, H. & Froebrich, J. & van Dam, J.C., 2017. "Irrigation water management: Farmers’ practices, perceptions and adaptations at Gumselassa irrigation scheme, North Ethiopia," Agricultural Water Management, Elsevier, vol. 191(C), pages 16-28.
    11. R Quentin Grafton & Long Chu & Paul Wyrwoll, 2020. "The paradox of water pricing: dichotomies, dilemmas, and decisions," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(1), pages 86-107.
    12. Long Chu & R. Quentin Grafton, 2019. "Policy Note: "Short-term Pain for Long-term Gain: Urban Water Pricing and the Risk-adjusted User Cost"," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1-14, April.
    13. Bithas, Kostas, 2008. "The sustainable residential water use: Sustainability, efficiency and social equity. The European experience," Ecological Economics, Elsevier, vol. 68(1-2), pages 221-229, December.
    14. Speelman, Stijn & Buysse, Jeroen & Farolfi, Stefano & Frija, Aymen & D'Haese, Marijke & D'Haese, Luc, 2009. "Estimating the impacts of water pricing on smallholder irrigators in North West Province, South Africa," Agricultural Water Management, Elsevier, vol. 96(11), pages 1560-1566, November.
    15. John P. A. Ioannidis & T. D. Stanley & Hristos Doucouliagos, 2017. "The Power of Bias in Economics Research," Economic Journal, Royal Economic Society, vol. 127(605), pages 236-265, October.
    16. Jinxia Wang & Henning Bjornlund & K. K. Klein & Lijuan Zhang & Wencui Zhang, 2016. "Factors that Influence the Rate and Intensity of Adoption of Improved Irrigation Technologies in Alberta, Canada," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 1-32, September.
    17. Finger, Robert, 2012. "Modeling the sensitivity of agricultural water use to price variability and climate change—An application to Swiss maize production," Agricultural Water Management, Elsevier, vol. 109(C), pages 135-143.
    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. Zhang, Cheng-Yao & Oki, Taikan, 2023. "Water pricing reform for sustainable water resources management in China’s agricultural sector," Agricultural Water Management, Elsevier, vol. 275(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. Vigren, Andreas & Pyddoke, Roger, 2020. "The impact on bus ridership of passenger incentive contracts in public transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 135(C), pages 144-159.
    2. Dimos, Christos & Pugh, Geoff & Hisarciklilar, Mehtap & Talam, Ema & Jackson, Ian, 2022. "The relative effectiveness of R&D tax credits and R&D subsidies: A comparative meta-regression analysis," Technovation, Elsevier, vol. 115(C).
    3. Roman Horvath & Ali Elminejad & Tomas Havranek, 2020. "Publication and Identification Biases in Measuring the Intertemporal Substitution of Labor Supply," Working Papers IES 2020/32, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Sep 2020.
    4. Burlig, Fiona, 2018. "Improving transparency in observational social science research: A pre-analysis plan approach," Economics Letters, Elsevier, vol. 168(C), pages 56-60.
    5. Tomas Havranek & Zuzana Irsova & Lubica Laslopova & Olesia Zeynalova, 2020. "Skilled and Unskilled Labor Are Less Substitutable than Commonly Thought," Working Papers IES 2020/29, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Sep 2020.
    6. Niklas Döbbeling-Hildebrandt & Klaas Miersch & Tarun M. Khanna & Marion Bachelet & Stephan B. Bruns & Max Callaghan & Ottmar Edenhofer & Christian Flachsland & Piers M. Forster & Matthias Kalkuhl & Ni, 2024. "Systematic review and meta-analysis of ex-post evaluations on the effectiveness of carbon pricing," Nature Communications, Nature, vol. 15(1), pages 1-12, December.
    7. Kroupova, Katerina & Havranek, Tomas & Irsova, Zuzana, 2024. "Student Employment and Education: A Meta-Analysis," Economics of Education Review, Elsevier, vol. 100(C).
    8. Stephan B. Bruns & David I. Stern, 2019. "Lag length selection and p-hacking in Granger causality testing: prevalence and performance of meta-regression models," Empirical Economics, Springer, vol. 56(3), pages 797-830, March.
    9. Havranek, Tomas & Rusnak, Marek & Sokolova, Anna, 2017. "Habit formation in consumption: A meta-analysis," European Economic Review, Elsevier, vol. 95(C), pages 142-167.
    10. Matteo Picchio & Michele Ubaldi, 2024. "Unemployment and health: A meta‐analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 38(4), pages 1437-1472, September.
    11. Tomáš Havránek & T. D. Stanley & Hristos Doucouliagos & Pedro Bom & Jerome Geyer‐Klingeberg & Ichiro Iwasaki & W. Robert Reed & Katja Rost & R. C. M. van Aert, 2020. "Reporting Guidelines For Meta‐Analysis In Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 34(3), pages 469-475, July.
    12. Thibaut Arpinon & Marianne Lefebvre, 2024. "Registered Reports and Associated Benefits for Agricultural Economics," Post-Print hal-04635986, HAL.
    13. Gezahegn, Tafesse & Van Passel, Steven & Berhanu, Tekeste & D'Haese, Marijke & Maertens, Miet, 2020. "Structural and Institutional Heterogeneity among Agricultural Cooperatives in Ethiopia: Does it Matter for Farmers’ Welfare?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 46(2), August.
    14. Fabo, Brian & Jančoková, Martina & Kempf, Elisabeth & Pástor, Ľuboš, 2021. "Fifty shades of QE: Comparing findings of central bankers and academics," Journal of Monetary Economics, Elsevier, vol. 120(C), pages 1-20.
    15. Cazachevici, Alina & Havranek, Tomas & Horvath, Roman, 2020. "Remittances and economic growth: A meta-analysis," World Development, Elsevier, vol. 134(C).
    16. Kaiser, Tim & Lusardi, Annamaria & Menkhoff, Lukas & Urban, Carly, 2022. "Financial education affects financial knowledge and downstream behaviors," Journal of Financial Economics, Elsevier, vol. 145(2), pages 255-272.
    17. Dominika Ehrenbergerova & Josef Bajzik & Tomas Havranek, 2023. "When Does Monetary Policy Sway House Prices? A Meta-Analysis," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(2), pages 538-573, June.
    18. Zigraiova, Diana & Havranek, Tomas & Irsova, Zuzana & Novak, Jiri, 2021. "How puzzling is the forward premium puzzle? A meta-analysis," European Economic Review, Elsevier, vol. 134(C).
    19. Heimberger, Philipp, 2023. "The cyclical behaviour of fiscal policy: A meta-analysis," Economic Modelling, Elsevier, vol. 123(C).
    20. Jindrich Matousek & Tomas Havranek & Zuzana Irsova, 2022. "Individual discount rates: a meta-analysis of experimental evidence," Experimental Economics, Springer;Economic Science Association, vol. 25(1), pages 318-358, February.

    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:eee:agiwat:v:228:y:2020:i:c:s0378377419304342. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/agwat .

    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.