Author Description

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.