"Virtual water and the inequality in water content of consumption"

Countries exporting agricultural goods are relatively abundant in the combined availability of water and arable land but, in absolute terms, scarce in capital and not richer in water in comparison to more developed ones.

In this paper, published in Environment and Development Economics, Mohamad Afkhami (Blend 360, Columbia), Thomas Bassetti (Department of Economics and Management “Marco Fanno” of the University of Padova), Hamed Ghoddusi (California Polytechnic State University) and Filippo Pavesi (Carlo Cattaneo University-LIUC), present evidence that international trade may increase the initial unequal distribution of water resources.

Due to both the scarcity of capital and the lower relative price of natural resources with respect to capital, the total value of production in these developing countries is modest, implying that international trade can lead to a less even distribution of the water content of consumption. Policies sustaining water prices and, more generally, those of natural resources (or lower capital costs) may help compensate this effect and allow for trade to play a positive role in reducing the uneven distribution of water endowments.

Read the full article here: https://unipd.link/Paper_Bassetti_Inequality_Water