TY - BOOK ID - 138873023 TI - Valuing Water for Chinese Industries : A Marginal Productivity Assessment AU - Lall, Somik AU - Wang, Hua PY - 1999 PB - Washington, D.C., The World Bank, DB - UniCat KW - Economic Theory and Research KW - Energy KW - Energy Production and Transportation KW - Environment KW - Environmental Economics and Policies KW - Groundwater KW - Industrial Sector KW - Industrial Use KW - Industrial Water KW - Industrial Water Demand KW - Industrial Water Use KW - Industry KW - Infrastructure Economics and Finance KW - Infrastructure Regulation KW - Macroeconomics and Economic Growth KW - Municipal Wastewater KW - Pollution KW - Production Process KW - Research KW - River Basins KW - Rivers KW - Town Water Supply and Sanitation KW - Water KW - Water and Industry KW - Water Conservation KW - Water Recycling KW - Water Resources KW - Water Shortage KW - Water Shortages KW - Water Supply KW - Water Supply and Sanitation KW - Water Supply and Sanitation Governance and Institutions KW - Water Supply and Systems KW - Water Treatment KW - Water Use UR - https://www.unicat.be/uniCat?func=search&query=sysid:138873023 AB - The marginal productivity of water used for industry varies among sectors in China, but there is great potential for the Chinese government to save water by raising water prices to industry, to encourage water conservation. Using plant-level data on more than 1,000 Chinese industrial plants, Wang and Lall estimate a production function treating capital, labor, water, and raw material as inputs to industrial production. They then estimate the marginal productivity of water based on the estimated production function. Using the marginal productivity approach to valuing water for industrial use, they also derive a model and estimates for the price elasticity of water use by Chinese industries. Previous studies used water demand functions and total cost functions to estimate firms' willingness to pay for water use. They find that the marginal productivity of water varies among sectors in China, with an industry average of 2.5 yuan per cubic meter of water. The average price elasticity of industrial water demand is about -1.0, suggesting a great potential for the Chinese government to use pricing policies to encourage water conservation in the industrial sector. Increasing water prices would reduce water use substantially. This paper - a product of Infrastructure and Environment, Development Research Group - is part of a larger effort in the group to understand the economics of industrial pollution control in developing countries. ER -