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This paper measures the performance and efficiency dynamics of provincial water use by differentiating the long-run persistent efficiency from the short-run transient efficiency. We combine the econometric frontier approach with panel Markov-switching and Tobit estimations to investigate the macro level data over the period 2002–2016. The results reveal evidence of significant provincial and regional disparities, with a mean efficiency of 0.42 in terms of water use. We find that a large share of inefficiency is attributed to the long-term structural component, with persistency inefficiency estimated as 55%. We also find that the probability of maintaining efficient is less sustainable (about 48.5% by the sixth year) compared with 54.3% for staying inefficient. Thus, it is relatively difficult to transition out of the less efficient state. We thus suggest policy directions for sustainable and efficient management of water resource use. [ABSTRACT FROM AUTHOR]

A constrained total water-use policy has been implemented to maintain sustainable water supply in some water shortage areas. Managing a constrained water-use quota (T) in water allocation is a challenging goal. This paper proposes a new framework for water allocation under total water-use constraint by utilizing the concept of the Newsboy model, commonly used in operations management and applied economics, and applying it to the Dongjiang River Basin, South China. This framework considersTas a state variable of the objective function, rather than simply dealing with it as a constraint of multi-objective analysis. Using this framework, it is revealed how different schemes ofTplay out in water allocation, and water-use warning is provided for each sector and water governor in water resources management. [ABSTRACT FROM PUBLISHER]