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The shortage of water for human consumption in Brazil has intensified in recent years. No different is the situation of the metropolitan region of Belo Horizonte (RMBH) who witnesses the most severe shortage of water in its history. In this context, this study estimates the economic impact of restrictions on supply or water price increases using an inter-regional computable general equilibrium model, the MINAS-Agua, for 34 municipalities of the RMBH. We seek to understand the importance of water as a productive input and in household consumption, and how the limitation of its use affects the economic decisions of sectors and households. The article proceeds to propose a general equilibrium approach to the subject, thus considering the interrelationships of markets, supply chains and the spatial heterogeneity of the distribution of economic activity in the RMBH. In general, the results of the simulations indicate that for a cut of 1% in total water consumption in the RMBH, an average increase of 7.3% in water tariff would be required. The overall effect of the use of water appears to be quite inelastic since the reduction of consumption is 1/7 of the rise in prices.

revista de economia

QUANTO VALE A ÁGUA QUE USAMOS? PROJEÇÕES DOS IMPACTOS ECONÔMICOS DE RESTRIÇÕES AO USO E ELEVAÇÃO DE PREÇOS DA ÁGUA NA REGIÃO METROPOLITANA DE BELO HORIZONTE