Khiz, Z., Zibaei, M., Farajzadeh, Z. (2019). National and Regional Implications of Drought for Production and Employment: A General Equilibrium Analysis. , 27(2), 55-81. doi: 10.30490/aead.2019.95409
Z. Khiz; M. Zibaei; Z. Farajzadeh. "National and Regional Implications of Drought for Production and Employment: A General Equilibrium Analysis". , 27, 2, 2019, 55-81. doi: 10.30490/aead.2019.95409
Khiz, Z., Zibaei, M., Farajzadeh, Z. (2019). 'National and Regional Implications of Drought for Production and Employment: A General Equilibrium Analysis', , 27(2), pp. 55-81. doi: 10.30490/aead.2019.95409
Khiz, Z., Zibaei, M., Farajzadeh, Z. National and Regional Implications of Drought for Production and Employment: A General Equilibrium Analysis. , 2019; 27(2): 55-81. doi: 10.30490/aead.2019.95409

National and Regional Implications of Drought for Production and Employment: A General Equilibrium Analysis

اقتصاد کشاورزی و توسعه
Article 3, Volume 27, Issue 2 - Serial Number 106, October 2019, Pages 55-81    PDF (283.01 K)
Document Type: Original Article
DOI: 10.30490/aead.2019.95409
Authors
Z. Khiz1; M. Zibaei2; Z. Farajzadeh* 3
1MSc Graduate in Agricultural Economics, Shiraz University, Shiraz, Iran.
2Professor, Department of Agricultural Economics, Shiraz University, Shiraz, Iran
3Assistant Professor, Department of Agricultural Economics, Shiraz University, Shiraz, Iran
Abstract
Drought is a natural hazard that causes the production and income losses and has severe effects on the poor households. In this context, a comprehensive assessment of economic impacts of drought provides critical information to drought mitigation policies and programs. To this end, the effects of drought on the output and employment of Iran's economy as a whole were examined using two models including a single-regional computable general equilibrium (CGE) and a multi-regional computable general equilibrium (MRCGE) model. Applied data were obtained from the social accounting matrix (SAM) of year 2001 and Iranian input-output table of year 2006. The drought defined as lower access to water was considered in three scenarios of weak, moderate and sever options. The results obtained from single-regional CGE model indicated that GDP decreased by 1.7 to 5.5 percent based on the severity of drought; the corresponding values for MRCGE were 2.2-6.4 percent. Reduction of regional gross output for Kerman, Hamedan, Fars, and Ardabil provinces were more than those for other provinces. As shown by the results, a decrease in output induced a fall in employment, but a reduction in employment was found lower than those of output. Finally, the study recommended developing the water-saving measures as well as creating more jobs in rural industries.
Keywords
Drought; Output; Employment; Multi-Regional Computable General Equilibrium (MRCGE)
References
  1. Ahmed, A., Bouis, H.W., Gutner, T. and Lofgren, H. (2001). The Egyptian food subsidy system structure, Performance, and options for reform research. International Food policy Research Institute (IFPRI). Washington D.C.
  2. Arndt, C., Robinson, S. and Trap, F. (2001). Parameter estimation for a computable general equilibrium model: a maximum entropy approach, Discussion Paper No: 40, International Food policy Research Institute (IFPRI), Washington, D.C.
  3. Arshadi, A. (2010). Analysis of private sector consumption in first semester of 2008. News in Economy (Tazehaye Eghtesad), 129: 30-34. (Persian)
  4. Biranvand, A., Babaei Kafaki, S. and Kiadaliri, H. (2011). Investigation the ecological factor s affecting fire spread in forest ecosystems (case study: Kakareza-Lorestan). Journal of Renewable Natural Resources Researches, 2(2): 1-13. (Persian)
  5. Changnon Jr, S.A. and Easterling, W.E. (1989). Measuring drought impacts. Journal of the American Water Resources Association, 25(1): 27-42.
  6. Daneshvar, M. and Zibaei, M. (2012). The effects of sprinkler irrigation system on copping with drought in Fars province. Journal Agricultural Economics, 5(4): 109-125. (Persian)
  7. Dixon, P.B., Rimmer, M.T. and Wittwer, G. (2007). The 2006-07 drought in Australia: analysis in TERM- H2O. Paper Presented at 36th Annual Conference of Economists, Hobert, 24- 26 September.
  8. Ejaz Qureshi, M., Hanjra, M.A. and Ward, J. (2013). Impact of water scarcity in Australia on global food security in an era of climate change. Food Policy, 38: 136-145.
  9. Farajzadeh, M. (1996). Drought and its methods of study. Forest and Range Quarterly, 32: 22-28. (Persian)
  10. Farajzadeh, Z., Zhu, X. and Bakhshoodeh, M. (2017). Trade reform in Iran for accession to the World Trade Organization: analysis of welfare and environmental impacts. Economic Modelling, 63: 75–85.
  11. Hayes, M.J., Svoboda, M.D., Wilhite, D.A. and Vanyarkho, O.V. (1999). Monitoring the 1996 drought using the standardized precipitation index. Bulletin of the American Meteorological Society, 80(3): 429- 437.
  12. Hill, R.V. and Porter, C. (2017). Vulnerability to drought and food price shocks: evidence from Ethiopia. World Development, 96: 65-77.
  13. Horridge, M. (2003). ORANI-G: a generic single-country computable general equilibrium model. Center of Policy Studies (cops), Monash University. Available at: http://www.monash.edu.au/policy/oranig.htm.
  14. Horridge, M. (2009). Hands on computing with ORANI-G: first simulation. Practical GE modelling course at Center of Policy Studies (CoPS), Monash University, Australia, 6-11 July.
  15. Hosseinzad, J., Javadi, A. and Kazemiyeh, F. (2012). Determination of groundwater extraction based on cost management (case study: Ajabshir plain). Water and Soil Science, 22 (2): 165-172. (Persian)
  16. Howitt, R.E., Medellín-Azuara, J., Mac Ewan, D., Lund, J. and Sumner, D. (2014). Economic analysis of the 2014 drought for California agriculture. Prepared for California Department of Food and Agriculture by UC Davis Center for Watershed Sciences and ERA Economics.
  17. Iglesias, E., Garrido, A. and Gómez-Ramos, A. (2003). Evaluation of drought management in irrigated areas. Agricultural Economics, 29: 211-229.
  18. International Water Management Institude (IWMI) (1993). Annual report 1992. Colombo. Srilanka: The Institute. ISSN, 1017-5954.
  19. Kahil, M.T., Dinar, A. and Albiac, A. (2016). Cooperative water management and ecosystem protection under scarcity and drought in arid and semiarid regions. Water Resources and Economics, 13: 60–74.
  20. Karami Kaloos, A. (2009). The effects of food subsidy reform on macroeconomic variables and social welfare in Iran: Application of computable general equilibrium model. PhD Thesis of Agricultural Economics, Faculty of Agriculture, Shiraz University. (Persian)
  21. Liu, C., Golding, D. And Gong, G. (2008). Farmers’ coping response to the low flows in the lower Yellow River: a case study of temporal dimensions of vulnerability. Global Environmental Change, 18(4): 543-553.
  22. Lofgren, H. and El-Said, M. (1999). A general equilibrium analysis of alternative scenarios for food subsidy reform in Egypt. International Food policy Research Institute (IFPRI). Washington, D.C.
  23. Lofgren, H., Harris, R.B. and Robinson, S. (2002). A standard computable general equilibrium (CGE) model in GAMS. International Food Policy Research Institute (IFPRI). Washington D.C.
  24. McKee, T.B. and Doesken, N.J. (1993). The relationship of drought frequency and duration to time scales. Eight Conferences on Applied Climatology. Anaheim, CA, American Meteorological Society. 179-18u PP.
  25. Medellín-Azuara, J., MacEwan, D., Howitt, R.E., Sumner, D.S. and Lund, J.R. (2016). Economic analysis of the 2016 California drought on agriculture. Center for Watershed Sciences, University of California-Davis.
  26.  Mirza'i, A.A. and Sabae, G.A. (2011). Water engineering specialist softwares (1st ed.). Tehran: Kian Publication. (Persian)
  27. Mohammad, V. and Samani, J. (2005). Water resource management and sustainable development. Tehran: Research Assistance of Iranian Islamic Council Parliament. Infrastructure Study Office.
  28. Mohsenpour, R. and Zibaei, M. (2010). Assessing the consequences of drought at farm level: a case study of Marvdasht region. Journal of Water and Soil Sciences, 14(52):49-62. (Persian)
  29. Mortazavi, S.M., Oleimani, K. and Ghafari Movafagh, F. (2011). Water resource management and land sustainable, the case study in Rafsanjan in Iran. Bimonthly Journal of Water and Wastewater, 2: 126-131. (Persian)
  30. Motavaseli, M. and Fouladi, M. (2006). Investigating the effects of global oil price increase on GDP and employment in Iran using a generalized computational equilibrium model. Journal of Economic Research, 41(5): 51-76. (Persian)
  31. Nasrnia, F. and Zibaei, M. (2017). Determination farmers' vulnerability patterns to drought in Iran: case study of Bakhtegan basin. Journal of Agricultural Economics Research, 9(2): 1-37. (Persian)
  32. Palmer, W.C. (1965). Meteorological drought (p. 58), Washington D.C., USA: US Department of Commerce, Weather Bureau.
  33. Parhizkari, A., Khodadadi Hoseyni, M., Taghizade Ranjbari, H. and Mahmoodi, A. (2015). Determining the appropriate economic strategy to conserve groundwater resources in Qazvin plain. Rural Development Strategies, 2(4): 477-496. (Persian)
  34. Partridge, M.D. and Rickman, D.S. (2004). CGE modelling for regional economic development analysis Draft Book chapter for State – of- the – Art in Regional and Urban Modeling, 20 December.
  35. Paul, B.K. (1998). Coping mechanisms practiced by drought victims (1994/5) in North Bengal, Bangladesh. Applied Geograghy, 18(4): 355-373.
  36. Pauw, K., Thurlow, J. and Van Seventer, D. (2010). Droughts and floods in Malawi (No. 962). International Food Policy Research Institute (IFPRI). Washington D.C.
  37. Peck, D. and Adams, R.M. (2009). Persistence of drought impacts across growing seasons: a dynamic stochastic analysis. Journal of Agricultural and Resource Economics. 101st EAAE Seminar ‘Management of Climate Risks in Agriculture’, Berlin, Germany.
  38. Rickman, D.S. (1992). Estimating the impacts of regional business assistance programs: alternative closures in a regional model. Papers in Regional Science, 71: 421-435.
  39. Rose, A. )1995(. Input-output economics and computable general equilibrium models. Structural Change and Economic Dynamics, 6: 295-304.
  40. Sahabi, B., Banouei, A.A. and Ghahremani, F. (2016). Measurement of the socio-economic impact of drought in the framework of modified supply-side Social Accounting Matrix (SAM): case study of farming sector. Journal of Agricultural Economics and Development, 94: 95-121. (Persian)
  41. Salami, H., Shahnooshi, N. and Thomson, K.J. )2009(. The economic impacts of drought on the economy of Iran: an integration of linear programming and macroeconometric modelling approaches. Ecological Economics, 68(4): 1032-1039.
  42. Samadi Boroujeni, H. and Ebrahimi, A. (2010). Drought consequences in Chaharmahal and Bakhtiari province and ways to deal with it. Water Resource Research Center. Sharekord: Sharekord University Publication. (Persian)
  43. Seung, C.K., Harris, T.R., Englin, J.E. and Netusil, N.R. (2000). Impacts of water reallocation: a combined computable general equilibrium and recreation demand model approach. Annals of Regional Science, 34(4): 473-487.
  44. Shi, M., Li, N., Yuan, Y., Zhang, Z. and Wang, F. (2009). Developing a multi- regional CGE model for China based on china interregional input-output model". 17th International Input- Output Conference, Sao Paulo, Brazil.
  45. Shoven, J.B. and Whalley, J.L. (1992). Applying general equilibrium. Cambridge: Cambridge University Press.
  46. Stage, F.K., Carter, H.C. and Nora, A. (2004). Path analysis: an introduction and analysis of a decade of research. The Journal of Educational Research, 98(1): 5-13.‏
  47. Statistical Center of Iran (2015). Fars province statistical yearbook. Available at:https://nnt.sci.org.ir/sites/Apps/yearbook/Lists/year_book_req/Item/newifs.aspx. (Persian)
  48. Young, R.A. (1995). Coping with a severe sustained drought on the Colorado river: introduction and overview. Journal of the American Water Resources Association, 31(5): 779-788.
  49. Yousefi, A., Khalilan, S. and Hajian, M.H. (2010). The role of water in Iranian economy: a CGE modeling approach. 11th Conference on Economic Modelling. Istanbul, 7-11 July.
  50. Ziaei, S. (2012). Simulation of drought consequences in the agricultural farming subsector in the country and in different provinces: construction and application of Iran ORANI-G model. PhD Thesis of Agricultural Economics, Faculty of Agriculture, University of Zabol. (Persian)
  51. Zoghipour, A. (2006). Effect of import tariff reduction on agricultural economics: computable general equilibrium framework. Master Thesis of Agricultural Economics, Faculty of Agriculture, Shiraz University. (Persian)
Statistics
Article View: 535
PDF Download: 305


counter
Journal management system. designed by sinaweb