Has the water rights system reform restrained the water rebound effect? Empirical analysis from China's agricultural sector

Improving water-saving irrigation technology and water use efficiency are often regarded as effective ways to control the amount of agricultural water consumption, but the rebound effect may offset this effort in practice. Based on the sample of 30 provinces in China from 2000 to 2017, this paper applies the meta frontier data envelopment analysis method to measure agricultural water efficiency, and then estimates the rebound rate of agricultural water resource applying difference-generalized method of moments and elasticity analysis formula. Further, the difference-in-difference model is used to test the effectiveness of China's water rights reform on China's agricultural water rebound rate in recent years. The results show that: (1) Within the survey period, the average agricultural water rebound rate of China in short-term and long-term were 0.49 and 0.66 respectively, and the water rebound rate in all provinces were positive, indicating that water rebound effect was widespread in China's agricultural water market; (2) Agricultural water rebound rates were significantly different among regions, which was higher in western region while were comparatively smaller in the eastern and central regions; (3) The water rights pilot project failed to restrain the rebound of agricultural water use, but promoted it, which may be resulted from the market frictions of water trade. According to the results, recommendations are put forward for the governments to reinforce management of water, improve water rights system and reduce trade costs, in order to reduce the friction of agricultural water market and the effective use of water resource.