Policy Analysis of Water Management Systems in China: Utilizing a Computable General Equilibrium Model on Drought Simulation

Abstract

　　This paper makes a comparative evaluation of two water management systems in China; i) a water parallel pricing system (WPP) and; ii) a water pricing system that are further separated into a system under current reform (WP_A) and a system under further reform (WP_B). This evaluation aims to identify a superior system for rural households and agricultural production with a decline in the water supply, such as a severe drought. WP_B is the superior system for rural households. However, a decrease in the domestic supply of farming commodities becomes more severe with the use of WP_B.
JEL Classifications: D58, E61, Q56