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GTAP Resource #7716

"Water Supply Management under Uncertainty: A Stochastic CGE Model with Application to Egypt"
Authors: Mohammed, Abdelradi


Abstract
Volatility in water supply is a main challenge in water management. This paper develops a
stochastic dynamic general equilibrium approach for modeling water supply in a water-scarce
economy. Water is used for production and final consumption and is supplied by stochastic
freshwater flows or through desalination. The stochastic general equilibrium model is devel-
oped as a quadratic system without an explicit objective function using recursive dynamic
programming techniques. The model is calibrated to the SAM data for Egypt 2019 and then
solved numerically. The results show that uncertainty reduces investment in the desalination
sector and increases investment in water-substituting capital instead. As a result, production
becomes less water-intensive with increasing uncertainty. Water storage is much higher under
uncertainty than in a deterministic model, and consumption is lower.


Resource Details () GTAP Keywords
Category: 2026 Conference Paper
Status: Published
By/In: Presented during the 29th Annual Conference on Global Economic Analysis (Kyoto, Japan)
Date: 2026
Version:
Created: Mohammed, A. (4/10/2026)
Updated: Mohammed, A. (6/29/2026)
Visits: 100
- Water availability
- Economic development
- Economic growth
- Dynamic modeling
- Africa (North)
- Middle East


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