scholarly journals Impact analysis of reducing multi-provincial irrigation subsidies in China: a policy simulation based on a CGE model

Water Policy ◽  
2017 ◽  
Vol 19 (2) ◽  
pp. 216-232 ◽  
Author(s):  
Shuai Zhong ◽  
Lei Shen ◽  
Litao Liu ◽  
Chao Zhang ◽  
Ming Shen
Keyword(s):  
Food Consumption ◽  
Irrigation Water ◽  
Water Scarcity ◽  
Computable General Equilibrium ◽  
Water Conservation ◽  
Impact Analysis ◽  
Rural Households ◽  
Computable General Equilibrium Model ◽  
Policy Option ◽  
Demand Elasticity

Water pricing policy is believed to be an efficient method for addressing the water scarcity problem in China. The motivation of this study is to provide a better understanding of how reducing irrigation subsidies impacts farming sectors and rural households. We apply a Computable General Equilibrium model to simulate the irrigation water and irrigation subsidy in 16 provinces. The results show that reducing irrigation has great potential for resolving the water scarcity problem in China, especially for the provinces with high subsidy levels such as Guangdong, Shandong, and Jilin. The declines in farming outputs are significant, and then their producer prices and imports increase. Rural households suffer serious losses in food consumption, particularly for those in Jilin, Guangdong, and Shandong. As for policy recommendation, improving the mobility of cropland should be given greater attention for promoting water conservation, and improving the mobility of agricultural labor could mitigate the losses in the farming outputs and in the food consumption for rural households in most provinces. Reduction in irrigation subsidy as a policy option should be adopted gradually, and then increasing the water demand elasticity should be taken into account when the irrigation water price is close to the full-cost recovery level.

Measuring drought based on a CGE model with multi-regional irrigation water

Water Policy ◽  
2016 ◽  
Vol 18 (4) ◽  
pp. 877-891 ◽  
Author(s):  
Shuai Zhong ◽  
Jinghua Sha ◽  
Lei Shen ◽  
Mitsuru Okiyama ◽  
Suminori Tokunaga ◽  
...  
Keyword(s):  
Irrigation Water ◽  
Computable General Equilibrium ◽  
Agricultural Production ◽  
Rural Households ◽  
Computable General Equilibrium Model ◽  
Cge Model ◽  
Hydrological Models ◽  
Economic Perspective ◽  
Total Consumption ◽  
External Impact

There have been many droughts in China that have caused severe losses. Previous studies evaluating droughts were from meteorological and hydrological perspectives. We measure the Chinese drought of 2000 based on a static computable general equilibrium model of China's macroeconomy, which describes the relationships between drought, agricultural production, and rural households' welfare from an economic perspective. In the model, the irrigation water inputs of the 16 regions of China are estimated and combined with the same regions' cropland inputs. Thus, the drought is simulated as an external impact by reducing the productivity of different crops in different regions. The reductions in 10 crop outputs and the rural households' welfare, total consumption and food consumption from 16 regions are more severe than those from a perfect market reaction. The findings herein are also distinct in that the five rural households that suffer most as a result of drought are from southern areas. The results provide an available reference for the Chinese government's decision on what measures to take to prevent drought and its impacts. The model can be further improved by incorporating meteorological and hydrological models to identify droughts using more accurate indexes.

scholarly journals Free Trade Agreements versus Customs Unions: An Examination of East Asia

2009 ◽  
Vol 8 (2) ◽  
pp. 119-139 ◽  
Author(s):  
Innwon Park ◽  
Soonchan Park
Keyword(s):  
East Asia ◽  
Free Trade ◽  
Computable General Equilibrium ◽  
East Asian ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Computable General Equilibrium Model ◽  
Policy Option ◽  
Customs Unions ◽  
Ex Post

The spaghetti bowl phenomenon expected from the proliferating East Asian regional trade agreements (RTAs) is worrisome. In particular, the complicated web of hub-and-spoke type of overlapping free trade agreements (FTAs) can result in high costs for verifying rules of origin. As an alternative policy option to avoid the negative effect of trade deflection, customs unions (CUs) should be examined. Most of the theoretical analyses on the formation of CUs highlight stronger positive welfare effects compared to FTAs. However, there is a lack of empirical evidence to support the second-best theory of customs unions. This paper is an attempt to fill this gap by applying two methodologies: an ex ante simulation approach and an ex-post econometric approach. We quantitatively estimate the trade effect of CUs and FTAs by adopting a Gravity regression analysis. In general, we find that a CU is a superior type of RTA to an FTA in terms of creating more intra-bloc trade. In addition to analyzing the trade effects of RTAs according to type, we quantitatively evaluate the welfare and output effects of CUs for East Asia (an ASEAN+3 CU and a China-Japan-Korea CU) compared to FTAs by applying a computable general equilibrium model analysis. The East Asian CUs adopt a system of common external tariffs (CET) based on simple-averaged, import-weighted, consumption-weighted, and minimum rates. Overall, we find that the ASEAN+3 CU with the minimum CET are the most desirable type of RTA for both East Asian member countries and the world economy as a whole.

scholarly journals The impact on the South African economy of alternative regulatory arrangements in the petroleum sector

2020 ◽  
Author(s):  
Heinrich Bohlmann ◽  
Rod Crompton
Keyword(s):  
South Africa ◽  
South African ◽  
Computable General Equilibrium ◽  
Impact Analysis ◽  
Computable General Equilibrium Model ◽  
The South ◽  
Real Wages ◽  
Fuel Price ◽  
Parity Price ◽  
The Impact

This paper adds quantitative analysis to the study by Crompton et al. (2020), in which various alternative regulatory arrangements regarding the petrol price in South Africa were explored. We use a multi-sector dynamic computable general equilibrium model for South Africa to conduct our economic impact analysis. Five scenarios are modelled, first individually to correctly calibrate the shocks, and then cumulatively to find the overall economy-wide effects of the proposed reforms. Under the most comprehensive set of reforms to the determination of petrol prices, which seeks to emulate market forces, the South African economy is seeing substantial benefits. GDP is expected to rise by 0.67 per cent and real wages by over 1.1 per cent relative to the baseline. Refineries are assumed to shrug off reforms targeted at removing pure profits earned via the import parity price (Basic Fuel Price) methodology by accepting a slightly lower rate of return, enabling them to meet the expected increase in demand for petrol on the back of the lower consumer prices achieved via the reforms. Whilst job losses at fuel service stations may be expected as a result of reduced revenues and margins, increased activity and job opportunities in the rest of the economy, facilitated through cheaper trade and transport margins, will more than offset those losses.

Economic impacts of changes in the forestry sector: A case study of the Foothills region in Alberta

1999 ◽  
Vol 75 (1) ◽  
pp. 121-127 ◽  
Author(s):  
Janaki R. R. Alavalapati ◽  
William White ◽  
Mike Patriquin
Keyword(s):  
Computable General Equilibrium ◽  
Impact Analysis ◽  
Regional Economics ◽  
Economic Impacts ◽  
Forest Products ◽  
Computable General Equilibrium Model ◽  
Local Economy ◽  
Forest Sector ◽  
Economic Impact Analysis ◽  
Negative Impacts

Economic impacts of a reduction in the annual allowable cut and in the price of forest products on the Foothills Model Forest regional economy are examined. A two-sector computable general equilibrium model is developed for the region to do this task. The results indicate that these changes cause significant negative impacts on the forest sector and on the local economy. Results show that other sectors of the economy will expand in response to the above changes in the forest sector. However, the expansion cannot offset the reduction in the forest sector and thus local communities sustain reduction in their income. The results are sensitive to the assumptions about markets for factors. Key words: economic impact analysis, CGE modeling, regional economics, community stability

scholarly journals The Impacts of COVID-19 on GDP, food prices, and food security

Q Open ◽  
2021 ◽  
Author(s):  
Jayson Beckman ◽  
Felix Baquedano ◽  
Amanda Countryman
Keyword(s):  
Sensitivity Analysis ◽  
Developing Countries ◽  
Food Security ◽  
Food Consumption ◽  
Computable General Equilibrium ◽  
Oil Prices ◽  
Computable General Equilibrium Model ◽  
Food Prices ◽  
Security Assessment ◽  
Cent Increase

Abstract COVID-19 has led to a wealth of research examining possible impacts; however, potential impacts to food security have received much less attention. We use a computable general equilibrium model to simulate the potential impacts of COVID-19 using observed changes from 2020 (September) in unemployment, trade, oil prices, and production to inform our model. Estimated GDP and food price changes are then used as inputs into the International Food Security Assessment (IFSA) model which estimates changes in food consumption, and food gaps in developing countries. Results indicate that the COVID-19 lockdowns lead to a decrease in global GDP of 7.2 per cent, and a decrease in grain prices of 9 per cent. These changes lead to an increase in the number of food-insecure people in 2020 of 211 million (a 27.8 per cent increase). We also perform a sensitivity analysis, providing a lower and upper bound of potential impacts from COVID-19.

An impact analysis of climate change on the forestry industry in Quebec

2018 ◽  
Vol 48 (2) ◽  
pp. 216-226
Author(s):  
Dorothée Boccanfuso ◽  
Luc Savard ◽  
Jonathan Goyette ◽  
Véronique Gosselin ◽  
Clovis Tanekou Mangoua
Keyword(s):  
Climate Change ◽  
Gross Domestic Product ◽  
Forest Fires ◽  
Computable General Equilibrium ◽  
Impact Analysis ◽  
Computable General Equilibrium Model ◽  
Domestic Product ◽  
Forest Industry ◽  
Climate Change Effects ◽  
Goods And Services

Quebec’s forests represent 20% of Canadian forests and 2% of the world forests. Over the entire planet, forests play a major role in habitat preservation and in supplying goods and services to the population. However, climate change will have an impact on the forest through inter alia increased droughts, forest fires, warmer weather, and infestations. In this paper, we analyze the economic impact of climate change on the forest industry in Quebec over a 40-year period using a recursive dynamic computable general equilibrium model. We find that the climate change effects will be relatively weak on most macroeconomic variables as agents adjust their behavior over time and factors are reallocated across sectors. We find that climate change could generate losses in gross domestic product of up to Can$300 million (0.12% of gross domestic product) at the end of a 40-year period for Quebec’s economy. However, we find relatively more important effects within the sectors of the forest industry, with losses ranging from 3% to 7.5%.

scholarly journals Designing Optimum Water-Saving Policy in China Using Quantity and Price Control Mechanisms

2019 ◽  
Vol 11 (9) ◽  
pp. 2529
Author(s):  
Khampheng Boudmyxay ◽  
Shuai Zhong ◽  
Lei Shen
Keyword(s):  
Irrigation Water ◽  
Computable General Equilibrium ◽  
Water Policy ◽  
Rural Households ◽  
Price Control ◽  
Control Mechanisms ◽  
Agricultural Water ◽  
Water Planning ◽  
The Government ◽  
Negative Impacts

In an attempt to alleviate water scarcity, the government of China has introduced a water plan for the year 2030. Based on a dynamic computable general equilibrium model, this paper investigates how conservation of irrigation water, grain production, and the welfare of rural households will be affected by planned reductions to the irrigation water subsidy between 2018 and 2030. Four policy instruments, namely quantitative control (QC), quantitative control with a subsidy reduction (QC-SR), price control (PC), and price control with a subsidy reduction (PC-SR) are employed in the model. Most existing research has found that reducing the irrigation subsidy will lead to significant negative impacts to the agricultural economy, and especially to rural households. These predicted negative impacts are a barrier to agricultural water policy pricing reform. However, the results of this research show that a provincial subsidy reduction to 1% between 2018 and 2030 will have an insignificant impact on agricultural production as well as rural household incomes and welfare, despite the subsidy rate currently accounting for more than 90% of the total irrigation value at the macro level in most provinces. Furthermore, PC will create a demand for irrigation water, which is predicted to rise to more than five times the agricultural water planning level currently set for 2030, and PC-SR will not achieve the agricultural water planning goal.

The Impact of the Public Expenditure Cuts Policy on the Labor Market in Vietnam

2012 ◽  
pp. 22-46
Author(s):  
Huong Nguyen Thi Lan ◽  
Toan Pham Ngoc
Keyword(s):  
Labor Market ◽  
Computable General Equilibrium ◽  
Impact Evaluation ◽  
Public Expenditure ◽  
Computable General Equilibrium Model ◽  
Living Standard ◽  
Input Output ◽  
Policy Makers ◽  
The Public ◽  
The Impact

The purpose of this study is to evaluate the impact of public expenditure cuts on employment and income to support policies for the development of the labor mar- ket. Impact evaluation is of interest for policy makers as well as researchers. This paper presents a method – that is based on a Computable General Equilibrium model – to analyse the impact of the public expenditure cuts policy on employment and income in industries and occupations in Vietnam using macro data, the Input output table, 2006, 2008 and the 2010 Vietnam Household Living Standard Survey.

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