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Decomposing Irrigation Water Use Changes in Equilibrium Models

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  • Haqiqi, Iman
  • Hertel, Thomas W.

Abstract

This paper measures the importance of different drivers of change in irrigation water use regionally and globally. We followed Heckscher–Ohlin theory, Ricardian specific-factor model, and Melitz-type theories of trade to introduce a method for decomposing irrigated water use. We apply the decomposition method on the results of Liu et al. (2014) on the impacts of future irrigation shortfalls. We find that rain fed substitution (specific-factor impact) contributes to 62% of change in water use; substitution to non-crops (Heckscher–Ohlin impact) accounts for 16% of the change; and moving to farms with higher water productivity (Melitz impact) contributes to 7% of it, globally. The importance of drivers varies by region but usually these three drivers are the most important factors in adaptation to water shocks.

Suggested Citation

  • Haqiqi, Iman & Hertel, Thomas W., 2016. "Decomposing Irrigation Water Use Changes in Equilibrium Models," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236185, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:236185
    DOI: 10.22004/ag.econ.236185
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    References listed on IDEAS

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    1. Peter B. Dixon & Maureen T. Rimmer & Glyn Wittwer, 2011. "Saving the Southern Murray‐Darling Basin: The Economic Effects of a Buyback of Irrigation Water," The Economic Record, The Economic Society of Australia, vol. 87(276), pages 153-168, March.
    2. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    3. 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.
    4. Calzadilla, Alvaro & Rehdanz, Katrin & Tol, Richard S.J., 2011. "The GTAP-W model: Accounting for water use in agriculture," Kiel Working Papers 1745, Kiel Institute for the World Economy (IfW Kiel).
    5. Fleming, David A. & Abler, David G., 2013. "Does agricultural trade affect productivity? Evidence from Chilean farms," Food Policy, Elsevier, vol. 41(C), pages 11-17.
    6. Charlotte Fraiture, 2007. "Integrated water and food analysis at the global and basin level. An application of WATERSIM," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 21(1), pages 185-198, January.
    7. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    8. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
    9. Dudu, Hasan & Chumi, Sinqobile, 2008. "Economics of irrigation water management : a literature survey with focus on partial and general equilibrium models," Policy Research Working Paper Series 4556, The World Bank.
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    Cited by:

    1. Haqiqi, Iman & Grogan, Danielle S. & Hertel, Thomas W. & Schlenker, Wolfram, 2019. "Predicting Crop Yields Using Soil Moisture and Heat: An Extension to Schlenker and Roberts (2009)," 2019 Annual Meeting, July 21-23, Atlanta, Georgia 291093, Agricultural and Applied Economics Association.
    2. Haqiqi, Iman, 2017. "Global Economic Response to Water Scarcity," Conference papers 332869, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Haqiqi, Iman & Bahalou Horeh, Marziyeh, 2018. "The Impacts of Climate Change on Surface and Ground Water Withdrawal: A New Global Data Base of Costs and Returns of Irrigation Part I: Background, Method, and Data," Conference papers 332975, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    Keywords

    Environmental Economics and Policy; International Relations/Trade; Land Economics/Use; Resource /Energy Economics and Policy;
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