A Pricing Model for Groundwater Rights in Ningxia, China Based on the Fuzzy Mathematical Model

Abstract

To reduce groundwater overexploitation and alleviate water shortages, market mechanisms are introduced to allocate water rights. Scientific and reasonable pricing of groundwater rights is key to ensuring the effectiveness of the groundwater market. Because of the complexity and uncertainty of water resources, this study calculates the price of groundwater rights based on the value of water resources with an evaluation indicator system. The system includes 14 indicators developed with a fuzzy mathematics model addressing three dimensions: environment, society, and economy. The weights of the indicators are determined through the analytic network process (ANP) and the entropy method. The results show that the price of groundwater rights in Ningxia, China increased from 5.11 yuan/m3 to 5.73 yuan/m3 between 2013 and 2017; this means the price was basically stable, with a slight increase. The ratio of residents’ water fee expenditures to real disposable income also remained essentially stable, fluctuating around 0.37%, far below the normal level. These data demonstrated that the current regional water price policy does not reflect the true value of groundwater resources; there is room to increase urban water prices. Local governments need speed up water price system reforms and adopt water rights systems to optimize water resource allocations.