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Estimating the Potential Water Transfer Prices Using Price Endogenous Theory

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  • Chi-Chung Chen
  • Shih-Hsun Hsu

Abstract

The purpose of this paper is to estimate the potential market price for the transfer of water among sectors in the Northern Taiwan region. This region is the major semiconductor and information technology product manufacturing area in Taiwan and plays an important role in contributing to domestic GDP. To this end, a regional water endogenous price economic model using a nonlinear programming approach is adopted in which the activity of transferring water from the agricultural sector to the non-agricultural sector in a water market is taken into consideration. In addition, the potential water transfer price is estimated using this empirical model under the assumption of social welfare maximization. The scenario results prove that the activity of transferring water from the agricultural sector to the non-agricultural sector could improve the benefits both in the water market and the agricultural sector. Copyright Springer Science+Business Media B.V. 2010

Suggested Citation

  • Chi-Chung Chen & Shih-Hsun Hsu, 2010. "Estimating the Potential Water Transfer Prices Using Price Endogenous Theory," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 24(12), pages 3237-3256, September.
    • Handle: RePEc:spr:waterr:v:24:y:2010:i:12:p:3237-3256
    DOI: 10.1007/s11269-010-9604-1
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    References listed on IDEAS

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    1. Keplinger, Keith O. & McCarl, Bruce A. & Chowdhury, Manzoor E. & Lacewell, Ronald D., 1998. "Economic And Hydrologic Implications Of Suspending Irrigation In Dry Years," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(1), pages 1-15, July.
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    Cited by:

    1. Se-Ju Ku & Seung-Hoon Yoo, 2012. "Economic Value of Water in the Korean Manufacturing Industry," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(1), pages 81-88, January.
    2. Massimiliano Calì & Stephan Nolte & Nicola Cantore, 2013. "Sweet and Sour Changes in Trade Regimes," The World Economy, Wiley Blackwell, vol. 36(6), pages 786-806, June.

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