Department of Resources and Environmental Economics, Environmental Sciences Research Institute, Shahid Beheshti University, Tehran. Iran.
10.22067/jwsd.v13i2.2602-1496
Abstract
Given the increasing scarcity of water resources and its vital role as an input in industrial production processes, this study estimates the economic value of water in two industries: the manufacture of basic metals and the manufacture of non-metallic mineral products. The research employs the production function approach based on the panel data econometric framework, using data from the Statistical Center of Iran for industrial establishments with 10 or more employees over the period 2004–2020 across six provinces, namely Khuzestan, Kermanshah, Kurdistan, Lorestan, Markazi, and Hamedan.The results indicate that the economic value of one cubic meter of water in the manufacture of non-metallic mineral products is estimated at 2,882.96 thousand Rials, while in the manufacture of basic metals it is approximately 1,380.2 thousand Rials. In contrast, the production cost of one cubic meter of water is approximately 64.6 thousand Rials, whereas the tariff paid by industrial users is only 27.0 thousand Rials per cubic meter. These figures reveal a substantial gap between the actual economic value of water in the industrial sector, its production cost, and the tariff paid by industries. Specifically, the average ratio of the economic value of water to its production cost in the industrial sector is 33, while the ratio of the water tariff paid to its economic value is less than 1.27%. These findings highlight the necessity of reforming the water pricing system and promoting the efficient use of water resources in order to reduce water consumption and improve water productivity in the industrial sector.
باقری، سعید، و شوریان، مجتبی. (1404). حکمرانی آب، چالش‌های اجتماعی، اقتصادی و نهادی در غیاب زیرساخت داده‌ای مناسب. نشریه حفاظت منابع آب و خاک، 15(4)، 16-1. https://doi.org/10.83037/wsrcj.2026.1233674
بلالی، حمید، و کسبیان لعل، فرزانه. (1401). ارزش‌گذاری اقتصادی منابع آب زیرزمینی در بخش کشاورزی (مطالعه موردی: دشت همدان–بهار). اقتصاد و توسعه کشاورزی، 36(1)، 37–48. https://doi.org/10.22067/jead.2022.72334.1079
تهامی‌پور، مرتضی، خزائی، علیرضا، کولیوند، فتانه. (1398). تحلیل نظام تعرفه و ارزش اقتصادی آب در بخش صنعت ایران. نشریه آب و توسعه پایدار، 6(3)، 19-30. https://doi.org/10.22067/jwsd.v6i3.76788
محبی، حسن، انصاری سامانی، حبیب، حاج امینی، مهدی، و مرادی، غلامحسین. (1401). برآورد ارزش اقتصادی آب در صنایع استان یزد، رهیافت ارزش تولید نهایی آب. فصلنامه سیاستهای مالی و اقتصادی، 10(39)،117-141. https://doi.org/10.52547/qjfep.10.39.117
Abounoori, A., & Mehrali, A. (2012). The analysis of elimination of subsidy on residential water demand case study: The City of Tehran. Economics Research, 12(45), 1-26.
Coelli, T., Rao, D.S.P., O'Donnell, C.J., & Battese, G.E. (2005). An Introduction to Efficiency and Productivity Analysis. Springer, Boston, MA. https://link.springer.com/book/10.1007/b136381
Dolan, F., Lamontagne, J., Link, R., Hejazi, M., Reed, P., & Edmonds, J. (2021). Evaluating the economic impact of water scarcity in a changing world. Nature Communications, 12(1), 1915. https://doi.org/10.1038/s41467-021-22194-0
Eslami, R., & Rahimi, A. (2019). Policymaking and Water Crisis in Iran. Journal of Management and Strategic Planning, 7(27), 410–435. https://doi.org/10.32598/JMSP.7.3.5
Fahimi, E., Fattahi Ardakani, A. & Fehresti, M., (2018). A managerial model for economic valuation of water resource functions: Case study of Zayandeh Rud River. Agricultural Economics, 12(1), 79–94. https://doi.org/10.22034/iaes.2018.31375
Xu, W. A. N. G., & Fei, W. A. N. G. (2019). No resource or no motivation? Government subsidies, green innovation and incentive strategy selection. Science Research Management, 40(7), 131-139.
Gibbons, D. C. (1986). The economic value of water. Resources for the Future. [Baltimore]: Distributed by Johns Hopkins University Press, Washington, D.C. https://librarycatalog.ecu.edu/catalog/291789
Iraj Pour, K., & Yavari, G. (2023). The role of structural changes on the economic growth of the country. In: Proceedings of the 7th International Conference on Knowledge and Technology of the Third Millennium in Economics, Management, and Accounting, Tehran, Iran.
Jia, S., Yang, H., Zhang, S., Wang, L. & Xia, J. (2006). Industrial water use Kuznets curve: Evidence from industrialized countries and implications for developing countries. Journal of Water Resources Planning and Management, 132(3), 183–191. https://doi.org/10.1061/(ASCE)0733-9496(2006)132:3(183)
Ku, S.J., & Yoo, S.H. (2012). Economic value of water in the Korean manufacturing industry. Water Resource Management, 26,.81–88.https://doi.org/10.1007/s11269-011-9905-z
Li, S., Swartworth, W.J., Takáč, M., Needell, D., & Gower, R.M. (2023). Using quadratic equations for overparametrized models. Order Up! The Benefits of Higher-Order Optimization in Machine Learning. New Orleans, Louisiana, USA, pp. 1–36.
Maaboudi, R., & Hasanvand, D. (2019). Relationship between economic value added and water consumption in agriculture and industry. Journal of Water and Wastewater Engineering, 4(1), 42–51. https://doi.org/10.22112/jwwse.2019.166520.1135
Mardones, C., & Orellana, A. (2023). Estimating production functions to determine the marginal economic value and price elasticity of water in the Chilean industrial sector. Utilities Policy, 85, 101677. https://doi.org/10.1016/j.jup.2023.101677
Marston, L., & Cai, X. (2016). An overview of water reallocation and the barriers to its implementation. WIREs Water, 3(5), 658–677. https://doi.org/10.1002/wat2.1159
Renzetti, S., & Dupont, D.P. (2003). The value of water in manufacturing. CSERGE, Working Paper ECM 03-03. University of East Anglia. Norwich, England.
Rodríguez-Tapia, L., Revollo-Fernández, D. A., Morales-Novelo, J. A., & Medina-Rivas, C. M. (2021). Water in Mexican industry: An economic value study. Applied Economics, 53(41), 4799–4809. https://doi.org/10.1080/00036846.2021.1908948
Tehami Pour Zarandi, M., 2017. Economic valuation: An approach for managing industrial water demand; case study: Chemical production industries. Journal of Water and Wastewater, 28(1), 74–83. https://doi.org/10.22093/wwj.2017.39476
Tobarra-González, M.Á. (2018). The value of water in the manufacture industry and its implications for water demand policies: The case of Chile. Studies of Applied Economics, 36(3), 945–960.https://doi.org/10.25115/eea.v36i3.2561
Valdivia Alcalá, R., Hernández Ortiz, J., Monroy Hernández, R., Rubiños Panta, J.E., Reyes Reyes, M., & Amaya Pérez, D. (2011). Valoración económica del agua en el sector industrial. Terra Latinoamericana, 29(4), 459–466.
Vásquez-Lavín, F., Vargas, L., Hernández, J.I. & Oliva, R.D.P., 2020. Water demand in the Chilean manufacturing industry: Analysis of the economic value of water and demand elasticities. Water Resources and Economics, 32, p.100159. https://doi.org/10.1016/j.wre.2020.100159
Wang, C., Shuai, C., Chen, X., Sun, J., & Zhao, B. (2024). Nexus between water consumption and economic output for the metallic and non‐metallic mineral products sector: An empirical analysis at the enterprise level. Advanced Sustainable Systems, 8(11), 2400279. https://doi.org/10.1002/adsu.202400279
Yazdani, S., & Pishbahar, E. (2004). Evaluation of the efficiency of cotton and sugar beet products in Iran using data envelopment analysis (DEA). Journal of Agriculture, 6(1), 57–67.
Young, R.A. (2005). Determining the Economic Value of Water: Concepts and Methods. Resources for the Future, Washington DC. ISBN 1891853988 (pbk.), 374 pp.
Zare, A., Haj Amini, M., & Feyzpour, M.A. (2022). Factors affecting industrial water demand in Iran and future challenges. Water and Sustainable Development, 9(2), 33–46.http://dx.doi.org/10.22067/jwsd.v9i2.2203.1129
Articles in Press, Accepted Manuscript Available Online from 16 September 2026
Jahangiri, S. & Nazari, M. R. (2026). Estimating the Economic Value of Water in the Industrial Sector: A Case Study of the Basic Metals and Non-Metallic Mineral Products Industries. (e48836). Journal of Water and Sustainable Development, (), e48836 https://doi.org/10.22067/jwsd.v13i2.2602-1496
MLA
Jahangiri, S., & Nazari, M. R. "Estimating the Economic Value of Water in the Industrial Sector: A Case Study of the Basic Metals and Non-Metallic Mineral Products Industries" .e48836 , Journal of Water and Sustainable Development, , 2026, e48836. doi: 10.22067/jwsd.v13i2.2602-1496
HARVARD
Jahangiri, S., & Nazari, M. R. (2026). 'Estimating the Economic Value of Water in the Industrial Sector: A Case Study of the Basic Metals and Non-Metallic Mineral Products Industries', Journal of Water and Sustainable Development, (), e48836. doi: 10.22067/jwsd.v13i2.2602-1496
CHICAGO
Jahangiri, S. & Nazari, M. R., "Estimating the Economic Value of Water in the Industrial Sector: A Case Study of the Basic Metals and Non-Metallic Mineral Products Industries." Journal of Water and Sustainable Development, (2026): e48836, doi: 10.22067/jwsd.v13i2.2602-1496
VANCOUVER
Jahangiri S., Nazari M. R. Estimating the Economic Value of Water in the Industrial Sector: A Case Study of the Basic Metals and Non-Metallic Mineral Products Industries. Journal of Water and Sustainable Development. 2026;():e48836 (In Persian). doi: 10.22067/jwsd.v13i2.2602-1496
