Valuing water for Chinese industries : a marginal productivity assessment

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Valuing water for Chinese industries : a marginal productivity assessment, Volume 1

Author:	Wang, Hua; Lall, Somik;	Collection Title:	Policy, Research working paper ; no. WPS 2236
Country:	China;	Date Stored:	1999/12/20
Document Date:	1999/11/30	Document Type:	Policy Research Working Paper
Language:	English	Major Sector:	Water, sanitation and flood protection
Region:	East Asia and Pacific	Report Number:	WPS2236
Sub Sectors:	Other Water Supply & Sanitation	SubTopics:	Water Conservation; Environmental Economics & Policies; Water and Industry; Economic Theory & Research; Town Water Supply and Sanitation; Water Supply and Sanitation Governance and Institutions; Decentralization
Volume No:	1

Summary: Using plant-level data on more than 1000 Chinese industrial plants, the authors estimate a production function treating capital, labor, water, and raw material as inputs to industrial production. They then estimate the marginal productivity of water based on the estimated production function. Using the marginal productivity approach to valuing water for industrial use, they also derive a model and estimates for the price elasticity of water use by Chinese industries. Previous studies used water demand functions and total cost functions to estimate firms' willingness to pay for water use. They find that the marginal productivity of water varies among sectors in China, with an industry average of 2.5 yuan per cubic meter of water. The average price elasticity of industrial water demand is about -1.0, suggesting a great potential for the Chinese government to use pricing policies to encourage water conservation in the industrial sector. Increasing water prices would reduce water use substantially.


Official Documents Official, scanned versions of documents (may include signatures, etc.)
File Type		Description	File Size (mb)

	PDF 28 pages	Official version*	1.96 (approx.)
	Text	Text version**


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File Type		Description	File Size (mb)

	PDF 24 pages	WPS2236	0.05

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