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The use of computable general equilibrium models to assess water policies

Author

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  • Berck, Peter
  • Robinson, Sherman
  • Goldman, George E

Abstract

This paper discusses basic issues in project analysis and shows how these issues can be resolved in a computable general equilibrium (CGE) framework. The role of border prices and intersectoral linkages is explored. The CGE framework is compared to less comprehensive frameworks, including benefit-cost analysis, input-output models, multi-market models, and models based on social accounting matrices (SAMs). An illustrative CGE model of the southern portion of the San Joaquin Valley is constructed and is used to find the effects of reducing water inputs on aggregate Valley gross domestic product (GDP) and on sectoral output, employment, and land use. The model is also used to determine demand curves for water by the southern portion of the Valley, given alternative specifications of production technology.

Suggested Citation

  • 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.
    • Handle: RePEc:cdl:agrebk:qt082465zv
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    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. Onil Banerjee & Martin Cicowiez & Mark Horridge & Renato Vargas, 2016. "A Conceptual Framework for Integrated Economic-Environmental Modelling," CEDLAS, Working Papers 0202, CEDLAS, Universidad Nacional de La Plata.
    4. 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.
    5. Scott Mcdonald & Sanri Reynolds & Melt Van Schoor, 2006. "Economic Impact Of A Provincial Fuel Levy: A Cge Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 74(3), pages 422-441, September.
    6. Jason F. L. Koopman & Onno Kuik & Richard S. J. Tol & Roy Brouwer, 2017. "The potential of water markets to allocate water between industry, agriculture, and public water utilities as an adaptation mechanism to climate change," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(2), pages 325-347, February.
    7. 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.
    8. 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).
    9. 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.

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