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Abstract
With growing water scarcity and increasing competition across water-using
sectors, the need for water savings and more efficient water use has increased in
importance in water resources management. Improvement in the physical efficiency of
water use is related to water conservation through increasing the fraction of water
beneficially used over water applied, while enhancing economic efficiency is a broader
concept seeking the highest economic value of water use through both physical and
managerial measures. Physical and economic efficiency measures are both useful
indicators for water management at the irrigation system and river basin level. However,
the relationship between physical efficiency and economic efficiency is not always clear
and the values of these measures may indicate different directions for water policy and
investments in irrigation. Open research questions include, for example: does
enhancement of physical water use efficiency always lead to improved economic water
use efficiency? How does the change in responsiveness of water allocation and irrigation
technology to economic incentives affect physical and economic irrigation efficiency?
What is the impact on physical and economic efficiency of various structural and
nonstructural improvements? To explore these issues, an integrated economic-hydrologic
river basin model is applied to the Maipo River Basin in Chile. A series of modeling
scenarios are defined and policy implications from physical and economic efficiencies for
basin-wide irrigation water management are analyzed.