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This report develops an integrated economic-hydrologic river basin model and applies it to the Maipo River Basin in central Chile. Policy simulations based on the modeling framework can serve as a guide for water resource managers and policymakers in designing appropriate water policies and establishing reform priorities for water resource allocation. Alternative analyses undertaken for the Maipo basin—a mature water economy with limited resources and competition for water across all water-using sectors—offer new insights into the changing relationships between irrigation system and basin-level water use efficiencies. They also show how these changing relationships affect farm incomes and environmental impacts. Simulations also provide new results on the role that the trading of water use rights can play in maintaining farm production levels, enhancing farmer incomes, and increasing water use efficiencies.

Ximing Cai is assistant professor of civil and environmental engineering at the University of Illinois at Urbana-Champaign. He was a postdoctoral fellow at IFPRI from 1999 to 2001 and a joint research fellow with IFPRI and the International Water Management Institute from 2002 to 2003.

Claudia Ringler is a research fellow in IFPRI's Environment and Production Technology Division, where she co-leads IFPRI's water research program.

Mark W. Rosegrant is the director of IFPRI's Environment and Production Technology Division.

The report is available for download in PDF format as an entire document or by chapter.

• Full Report
  (PDF 2.9M)
• Abstract
  (PDF 80K)

• Table of Contents, List of Tables, List of Figures, List of Boxes, Foreword, Acknowledgments, and Summary
  (PDF 65K)
• Chapter 1: Introduction
  (PDF 33K)
• Chapter 2: The Chilean Context and the Study Basin
  (PDF 317K)
• Chapter 3: Modeling Framework
  (PDF 601K)
• Chapter 4: Model Implementation and Solution
  (PDF 432K)
• Chapter 5: Basin-Optimizing Solution and Sensitivity Analyses
  (PDF 126K)
• Chapter 6: Water Trade Analysis
  (PDF 78K)
• Chapter 7: Water Use Efficiency Analysis
  (PDF 332K)
• Chapter 8: Irrigation Technology Choice under Uncertainty
  (PDF 430K)
• Chapter 9: Analysis of Water versus Other Inputs in an Integrated Economic-Hydrologic Modeling Framework
  (PDF 497K)
• Chapter 10: Conclusions and Recommendations
  (PDF 46K)
• Appendix A: Model Formulation
  (PDF 94K)
• Appendix B: Input Parameters and Model Output
  (PDF 80K)
• Appendix C: Average Crop-Level Shadow Prices versus Demand-Site Level Shadow Values
  (PDF 81K)
• References
  (PDF 46K)

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