Resources Science ›› 2019, Vol. 41 ›› Issue (2): 313-325.doi: 10.18402/resci.2019.02.10

• Orginal Article • Previous Articles     Next Articles

Models for differential pricing of bulk water rights trading

Guiliang TIAN(), Yucan HU   

  1. Business School of Hohai University, Nanjing 211100, China
  • Received:2018-06-28 Revised:2018-12-12 Online:2019-02-25 Published:2019-02-25

Abstract:

The two types of regional water rights and water rights trading modes exhibit a wide range of influence and high social sensitivity, which are the two major modes of bulk water rights trading in China. The price mechanism is one of the core elements of cultivating and activating two major water rights markets. The current study summarizes the adaptability of the existing pricing models and pricing mechanisms in the pricing of bulk water rights transactions, and puts forward that water rights prices reflect the users’ ability to use water resources productively. On the basis of full-cost prices, a negotiated pricing model for regional water rights and a bidding model for water rights are established to demonstrate the mechanism of market competition mechanisms for water rights appreciation. In detail, the price of regional water rights transaction is negotiated by both parties according to the cost evaluation price of the third party organization, while the price of water rights is generated by the buyers’ bidding starting from the cost evaluation price. Taking the transfer of water rights between Inner Mongolian and Yellow River mainstream cities as an example, a case study of the pricing model was conducted. This study argues that the market bidding should be adopted to form the price of 20 million m3/year water rights transaction in the pilot phase of water right transfer between cities in the mainstream of the Yellow River in the Inner Mongolia Autonomous Region. Finally, several countermeasures are proposed, e.g., establishing the awareness of commodity attributes of large-scale economic water and water rights, improving basic water price assessment mechanisms for bulk water rights, integrating bulk water rights transactions into bulk commodity trading systems, and establishing various forms of bulk water rights trading platforms.

Key words: market orientation, bulk water rights trading, differential pricing, pricing through negotiation, water rights bidding, mainstream of the Yellow River, Inner Mongolia