Water Economics and Policy

In this research, the system dynamics method was applied to investigate the effect of technical and economic parameters on the water fee and provide a solution to find the actual price of water. To assess the performance of the simulated model, the financial balance and explanatory notes of the Rural Water and Wastewater Company of Hamedan province were used from 2011 to 2016. Comparing the simulation results and observational data, the correlation coefficient and normalized root mean square error indexes were obtained at 0.99% and 4%, respectively. The results indicated that despite raising the water fee in recent years, the company’s financial balance was negative, the balance diagram further declined over time, and the company losses increased. Sensitivity analysis showed that the fund balance of the company was more water fee-sensitive and its sensitivity to the time had an increasing trend. However, an increase in the water fee has no remarkable effect on the customer’s willingness to pay for the water. In addition, Powell’s optimization algorithm suggested the lowest water fee to prevent a negative fund balance in the company.

Agricultural intensification is a key driver of water pollution in many parts of the world. A frequent policy response is to implement mitigation measures in the context of agri-environmental schemes (AESs). We develop a hydro-economic modeling procedure to design cost-effective AESs to mitigate water pollution from nitrogen and phosphorus from cropland. Our procedure considers spatial heterogeneity of mitigation impacts and of costs of cropland management measures. It further takes into account in the optimization that AES participation is voluntary and farmers who may participate in an AES will select between different cropland management measures. We demonstrate how the procedure works by applying it to the Baishahe watershed in Shanxi Province, China. As a result, we obtain a cost-effective AES with a set of cropland management measures and the associated payment levels that are able to achieve weighted minimized nitrogen and phosphorus loads in the watershed for different budgets. We find, for example, that a cost-effective AES for a budget of 100,000RMB consists of the two measures of implementing a filter strip of 5m and reducing chemical fertilizers by 25% for which the farmers receive payments of 134RMB and 88RMB, respectively, which induces the reduction of nitrogen by 6.9% and phosphorus by 7.8%.

Increased reliance on groundwater for irrigation in India has resulted in its overexploitation, raising concerns about its long-term sustainability. The groundwater situation is severe particularly in the Northern–Western Green Revolution states of Punjab and Haryana. The provision of free (in Punjab) and heavily subsidized (in Haryana) electricity for tube-wells has resulted in the inefficient use of groundwater, which has contributed to its overexploitation. The primary objective of this study is to analyze the technical and groundwater irrigation efficiency of rice and wheat crops on sample farms in both states, as well as to determine the key factors impacting efficiency. This was accomplished using a non-parametric DEA model using cross-sectional data from 400 farms in Punjab and Haryana. The findings demonstrated disparities in both technical and groundwater consumption efficiency levels in both inter-state and intra-state scenarios. In both states, groundwater irrigation efficiency was found to be lower than technical efficiency. The mean technical efficiency for both crops has been found to be over 80% in both states, with irrigation efficiency being around 70%. Tube-well accessibility status, agriculture extension service access, fragmented landholdings, and adherence to standard crop irrigation practices were found to have a positive impact on technical and irrigation efficiency levels in both states.

Hedonic price models are commonly used to estimate implicit prices for lake water quality across small geographic regions that might be assumed to be a part of a common real estate market. Yet recent studies expand the geographic scale of the hedonic model potentially obscuring important differences in implicit prices across markets. We estimate implicit prices for lake water quality across multiple states in the northeast and upper Midwest in the United States of America at three different geographic scales: substate, state, and multistate. We find implicit price estimates are heterogeneous at both the substate and state-levels, which is not accounted for in state-level or multistate hedonic models. Our results show that estimates across a broad geographic scale can be driven by a single subregion within the defined area. Overall, the study demonstrates that using a single hedonic model over a large geographic area may obscure important heterogeneity in implicit prices used to estimate potential benefits for water-quality improvements.

Ecologically rational restoration of urban inland rivers is crucial for sustainable development of modern cities. The research purpose is to assess and compare the value of urban inland rivers by identifying the willingness of Nanyang residents to pay for each of two types of rivers restoration — ecological (improving the ecological quality of rivers) and recreational (ensuring rivers to meet cleanliness requirements for residents’ recreational areas) as well as to identify the factors that determine the difference in the obtained estimates. The novelty of the study consists in the willingness to pay (WTP) for ecological and recreational restoration of urban inland rivers identification and comparison by using the two dichotomous choice questionnaires and in the determination of factors explaining the difference in ecological and recreational value estimates. A questionnaire survey was conducted in Nanyang City, and data was collected from a sample of 326 respondents. The results of the questionnaire survey revealed quite significant difference between the willingness of urban residents to pay for ecological and recreational restoration of the river — CNY109.56 (USD16.8) and CNY255.12 (USD39.84) per person annually, respectively. Factors influencing differences in WTP for ecological and recreational restoration of urban inland rivers — income level, gender, education level, environmental awareness, need for recreation, and distance to urban inland rivers — were identified. The study’s results indicate that urban inland rivers hold a significant economic value and highlight the importance of implementing measures for targeted ecological and recreational restoration as part of the overall urban river restoration system.