Water modeling at the basin scale: the Maipo river basin

What is it about?

This paper introduces an integrated economic–hydrologic modeling framework that accounts for the interactions between water allocation, farmer input choice, agricultural productivity, non-agricultural water demand, and resource degradation in order to estimate the social and economic gains from improvement in the allocation and efficiency of water use. Economic benefits to water use are evaluated for different demand management instruments, including markets in tradable water rights, based on production and benefit functions with respect to water for the agricultural and urban-industrial sectors.

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Why is it important?

Increasing competition for water across sectors increases the importance of the river basin as the appropriate unit of analysis to address the challenges facing water resources management; and modeling at this scale provides essential information for policymakers in their resource allocation decisions.