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Water 2015, 7(6), 2908-2923; doi:10.3390/w7062908

Welfare Effects of Water Variability in Agriculture. Insights from a Multimarket Model

1
Facultad de Economía y Negocios, Universidad del Desarrollo, Ainavillo 456, Concepción 4070001, Chile
2
Departamento de Economía y Ciencias Sociales Agrarias, Universidad Politécnica de Madrid, Avda. Complutense 3, Madrid 28040, Spain
3
Dipartimento di Economia, Universita Ca'Foscari di Venezia, S. Giobbe 873, Venezia 30121, Italy
These authors contributed equally to this work.
*
Author to whom correspondence should be addressed.
Academic Editor: Miklas Scholz
Received: 30 March 2015 / Accepted: 8 June 2015 / Published: 16 June 2015
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Abstract

The purpose of this research is to assess the welfare effects of climate change on the Chilean agricultural sector, with special focus on changes in water availability. The productive impacts of climate change on the agricultural sector are well analyzed at both a global and national level. There is, however, a lack of evidence about the aggregated impacts, considering both demand and supply. This study tries to fill this gap by using a multimarket model, specifically designed for the Chilean agricultural sector. According to our results, changes in water availability will have modest welfare impacts, with an average decrease of total surplus of 4.3%, minor price changes (around −1%), and no significant impacts on total agricultural land. Despite the small aggregated effects, it is expected that climate change will have uneven consequences across regions and activities. For instance, even though the southern zone (zone 3) shows the smallest income changes −14% (average), the impacts within the zone range from 1% to 52% decrease in agricultural net income. This situation suggests large distributional consequences of climate change for the Chilean agricultural sector. View Full-Text
Keywords: agricultural multimarket model; climate change; agriculture; water resources; uncertainty agricultural multimarket model; climate change; agriculture; water resources; uncertainty
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Ponce, R.; Blanco, M.; Giupponi, C. Welfare Effects of Water Variability in Agriculture. Insights from a Multimarket Model. Water 2015, 7, 2908-2923.

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