THE VALUE OF THE HIGH ASWAN DAM TO THE EGYPTIAN ECONOMY

Kenneth Strepek, Gary Yohe, Richard S.J. Tol () and Mark W. Rosegrant ()

No FNU-111, Working Papers from Research unit Sustainability and Global Change, Hamburg University

Abstract: The High Aswan Dam converted a variable and uncertain flow of river water into a predictable and controllable flow. We use a computable general equilibrium model of the Egyptian economy to estimate the economic impact of the High Aswan Dam. We compare the 1997 economy as it was to the 1997 economy as it would have been for 72 historical, pre-dam water flows. The steady water flow increased transport productivity, while the seasonal shift in water supply allowed for a shift towards more valuable summer crops. These static effects are worth LE 4.9 billion. Investments in transport and agriculture increased as a consequence. Assuming that Egypt is a small open economy, this is worth another LE 1.1 billion. The risk premium on the reduced variability is estimated to be LE 1.1 billion for a modest risk aversion, and perhaps LE 4.4 billion for a high risk aversion. The total gain of LE 7.1 billion equals 2.7% of GDP.

Keywords: Egypt; High Aswan Dam; computable general equilibrium model; risk premium; water supply (search for similar items in EconPapers)
JEL-codes: C68 O13 Q25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr, nep-agr and nep-cmp
Date: 2006-06, Revised 2006-06
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Published, Ecological Economics, 66 (1), 117-126

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http://www.fnu.zmaw.de/fileadmin/fnu-files/publica ... g-papers/aswanwp.pdf First version, 2006 (application/pdf)

Related works:
Journal Article: The value of the high Aswan Dam to the Egyptian economy (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:sgc:wpaper:111

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