The intertemporal choice study of individual water-saving irrigation construction under three water pricing and subsidy scenarios

Yang Yang, Weijun He, Ningye Jiang, Shasha Xu, Thomas Stephen Ramsey and Liang Yuan

Agricultural Water Management, 2024, vol. 295, issue C

Abstract: The world is confronted with increasing droughts exacerbated by the inefficiency of irrigation, and water-saving irrigation (WSI) holds the potential to alleviate this dilemma. Since individual farmers are important participants in WSI, it is imperative to account for their decision preferences. In addition, previous research did not consider the decision reverse in the intertemporal choice of WSI construction. Recognizing the presence of bounded rationality, particularly in terms of time preference inconsistency, a hyperbolic discounting model is constructed. The implicit subsidy, explicit subsidy, and improved explicit subsidy scenarios are simulated to analyze the decision process of individual farmers in WSI construction. The proposed methods are applied to discuss the construction of WSI within the Taocheng District, Hebei Province. The results show that: (1) The participation and stability of individual WSI construction demonstrated an increase in both the explicit subsidy and improved explicit subsidy. (2) Compared with the implicit subsidy, there was a 29.6% decrease in the number of participants who chose not to engage in WSI construction at different intertemporal choice points in the explicit subsidy scenario, and the inconsistency of choice in different intertemporal choice points decreased from 70.4% to 31.4%. (3) In the improved explicit subsidy scenario, the inconsistency of choice in different intertemporal choice points will be further reduced to 22.5%. In order to promote WSI construction for water conservation, the policy implications of the subsidy mechanism are proposed in this paper.

Keywords: Water-saving irrigation; Intertemporal choice; Hyperbolic discounting model; Mechanism design (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:agiwat:v:295:y:2024:i:c:s0378377424000957

DOI: 10.1016/j.agwat.2024.108760

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