Water pricing and the value-add of irrigation water in Vietnam (funded by the ANU, 2019)

Vietnam is one of several countries suffering from climate change, experiencing increased frequency and severity of droughts. These climate risks have raised concerns about water security, prompting policymakers to assess the added value of water in irrigation. This research project measures the added value of irrigation water for non-compulsory food crops in Vietnam by formalizing a crop choice model and fitting it to data from a national household survey. The findings of this research project highlight the importance of water pricing as a potential policy option and demonstrate that setting an appropriate volumetric price for irrigation water extractions could lead to welfare-improving water reallocations.

VPS people: Long Chu & Quentin Grafton