Analyzing the Effect of the Water Reduce Subsidies on GDP

الموضوعات :

Seyed Mahdi Hosseyni ¹ (Ph.D Student at University of Sistan and Baluchestan, Iran)
Javad Shahraki ² (Assistant Professor Economics, University of Sistan and Baluchestan, Iran)

تاريخ الإرسال : 07 الأحد , محرم, 1435 تاريخ التأكيد : 18 الأحد , ربيع الأول, 1435 تاريخ الإصدار : 29 السبت , ربيع الثاني, 1435

الکلمات المفتاحية: GDP, Water Subsidies Reform, Computable General Equilibrium Model and Gams,

ملخص المقالة :

The objective of this work is to analyze the effects of decrease in water subsidies (increase in the price of the water) on various economic sectors in order to promote the conservation of this resource based on the actual price of water. But over the past decades, various subsidizing methods hold the cost of water down. On the other hand, the indiscriminate use of these resources led the government to impose enormous costs. Determining the economic impact of subsidy reform can be an essential factor in the determination of water price reform scenarios. The methodology that will be used to explore the implications on the economy will be a computable general equilibrium model (CGE), previously designed for an analysis of the direct taxes of the Andalusian economy (Cardenete and Sancho, 2003), but now enhanced and extended to include emissions of pollutants and the introduction of environmental taxes (André, Cardenete and Velázquez, 2005). This model has been further modified to introduce the variations in the water price that this study investigates the effect of water subsidy reform on the economy based on six scenarios using computable general equilibrium model. Results show that by decreasing subsidies, GDP will reduce in all economic sectors. Government can prevent the decrease in production by redistributing incomes.

المصادر:

1-Armington, P.S. (1969). A theory of demand forproducts distinguished by place of production, InternationalMonetary Fund, Staff Papers-InternationalMonetary Fund, 16: 159-178. [DOI via Crossref]

2-Arrow, K.J. & Dubreu, G. (1954). Existence of anEquilibrium for a Competitive Economy, Journal ofEconometrical, 22, 90- 265.

3-André, F.J., Cardenete, M.A & Velázquez, E.(2005). Performing an environmental tax reform ina regional economy, a computable general equilibriumapproach. Annals of Regional Science, 39(2),375-392. [DOI via Crossref]

4-Berbel J. & Gómez-Limón, J.A. (2000). The impactof water-pricing policy in Spain: an analysis ofthree irrigated areas. Agricultural Water Management,43 (2), 219-238. [DOI via Crossref]

5-Bielsa J. (1998). Modelización de la gestión integradaDel agua en el territorio: magnitudes asociadasdesde una perspectiva económica, Ph.D.Dissertation, Universidad de Zaragoza.

6-Boyd, R. & Newman, D.H. (1991). Tax reformand land-using sectors in the US economy: A generalequilibrium analysis. American Journal of AgriculturalEconomics, 73(2), 398-409. [DOI via Crossref]

7-Briand, A. (2004). Comparative water pricinganalysis: duality formal-informal in a CGE model forSenegal. Paper presented in the Conference Input-Output and General Equilibrium: Data, Modellingand Policy Analysis. Brussels, 2-4 September 2004.

8-Cardenete, M. A. & Hewings, G. (2011). Waterprice and water sectoral reallocation in Andalusia. Acomputable general equilibrium approach. EnvironmentalEconomics, 2, 17-27.

9-Cardenete, M.A. & Sancho, F. (2003). An appliedgeneral equilibrium model to assess the impact ofnational tax changes on a regional economy, Reviewof Urban Development Studies, 15 (1), 55-65. [DOI via Crossref]

10-Decaluwe, B., Patry, A. & Savard, L. (1999).When water is no longer heaven sent: comparativepricing analyzing in an AGE model,Working paper9908. CRÉFA 99-05. University of Laval.

11-Dietzenbacher, E. & Velázquez, E. (2006).Analysing andalusian virtual water trade in an inputoutputframework. Working paper, series Econ I,Universidad Pablo de Olavide.

12-Diao, X. & Roe, T. (2000). The win-win effectof joint and trade reform on interest groups in irrigatedagriculture in Morocco, in The Political Economyof Water Pricing Reforms, edited by A. Dinar,pp. 141ââ‚‌"165, Oxford Univ. Press, New York.

13-Dinar, A., & Subramanian, A. (1998). Policy implicationsfrom water pricing experiences in variouscountries, Water Policy, 1, 239-250. [DOI via Crossref]

14-Dixon, P.B. (1990). A general equilibrium approachto public utility pricing: determining pricesfor a water authority, Journal of Policy Modelling,12 (4), 745-767. [DOI via Crossref]

15-Doppler, W., Salman A.Z., Al-Karablieh, E.K. &Wolff, H-P. (2002). The impact of water price strategieson the allocation of irrigation water: the case ofJordan Valley, Agricultural Water Management, 55(3), 171-182. [DOI via Crossref]

16-Duarte, R. (1999). Estructura productiva y contaminaciónhídrica en el valle Del Ebro. UN análisisinput-output. Ph.D. Dissertation. Universidad deZaragoza.

17-Duarte R., Sánchez-Chóliz, J. & Bielsa, J.(2002). Water use in Spanish economy: an input-outputapproach, Ecological Economics, 43, 71-85. [DOI via Crossref]

18-GAMS Development Corp. (2001). GAMS version2.5, solver PATH, Software,Washington, D.C.

19-Gomez, C. M., Tirado, D. & Rey-Maquieira, J.(2004). Water exchanges versus water works: Insightsfrom a computable general equilibrium modelfor the Balearic Islands. Water Resource, Res, 40. [DOI via Crossref]

20-Goodman, D.J. (2000). More reservoirs or transfers?A computable general equilibrium analysis ofprojected water shortages in the Arkansas RiverBasin, Journal of Agricultural and Resource Economics,25(2), 698ââ‚‌"713.

21-Hewings, G.J.D., Dridi, C. & Guilhoto, J.J.M.(2006) .Impacts of reallocation of resource constraintson the northeast economy of brazil, Discussion Paper06-T-01, Regional Economics Applications Laboratory,University of Illinois, Urbana.www.uiuc.edu/unit/real.

22-Horridge, J.M., Dixon, P.B. & Rimmern, M.T.(1993). Water pricing and investment in Melborne:General equilibrium analysis with uncertain streamflow,Working Pap. IP-63, Cent. of Policy Stud. Andthe Impact Proj, Monash Univ., Melbourne, Victoria,Australia.

23-Johansson, R., Tsur, Y., Roe, T., Doukkali, R.,Dinar, A. (2002). Pricing irrigation water: a reviewof theory and practice. Water Policy, 4 (2), 173-199. [DOI via Crossref]

24-Kehoe, T. J. & Jaime, S. P. (1983). A computationalgeneral equilibrium model with endogenousunemployment, Journal of Public Economics, 22,PP. 1-26.

25-Kumar R., Young C. (1996). Economic policiesfor sustainable water use in Thailand. InternationalInstitute for Environment and Development.

26-Lofting, E.M. & Mcgauhey, P.H. (1968). Economicvaluation of water. An input-output analysisof California water requirements, Contributionnº116. Water Resources Center. [Pubmed]

27-Lofgren, H., LeeHarris, R., Robinson. (2002). Astandard computable general equilibrium (CGE)Model in GAMS, (Vol. 5). International Food PolicyResearch Institute, 2033 K Stteet, N.W., Washington,D.C., 20006-1002, U.S.A.

28-Qin, C., Jia, Y., Su, Z., Bressers, H.T., & Wang,H. (2012). The economic impact of water tax chargesin China: a static computable general equilibriumanalysis. Water International, 37(3), 279-292. [DOI via Crossref]

29-Saénz de Miera, G. (1998). Modelo input-outputpara el análisis de las relaciones entre la economía yel agua. Aplicación al caso de Andalucía. Ph. D. Dissertation.Universidad Autónoma de Madrid.

30-Sánchez-Chóliz, J., Bielsa, J. & Arrojo, P. (1992).Water values for Aragon, Environmental and LandIssues. Wissenschaftsverlag vank Kiel KG. Ed. Albisu,L.M. and Romero, C. EAAE, CIHEAM.

31-Seung, C., Harris, T., Englin, J. & Netusil, N.(2000a). Impacts of water reallocation: a combinedcomputable general equilibrium and recreation demandmodel approach, Annals of Regional Science,34, 473-487. [DOI via Crossref]

32-Seung, C., Harris, T., Englin, J. & Netusil, N.(2000b). Application of a Computable General Equilibrium(CGE) Model to evaluate surface water rellocationpolicies, The Review of Regional Studies,vol 29, nº2, 139-156.

33-Susangkarn, C., Kumar, R. (1997). A computablegeneral equilibrium model for Thailand incorporatingnatural water use and forest resource accounting,Asian-Pacific Economic Literature, 12 (2), 196-209.

34-Thabet, C., Macgregor, B., & Surry, Y. (1999).Effets macro-économiques de la politique du prix del'eau d'irrigation en Tunisie. Économie rurale,254(1), 28-35. [DOI via Crossref]

35-Velázquez, E. (2006). An input-output model ofwater consumption, Analyzing Intersectoral WaterRelationships in Andalusia. Ecological Economics,56 (2), 226-24. [DOI via Crossref]