Abstract: The water use benefit function indicates the characteristics of economic benefits varying with water use. According to the panel data of water use and economic growth indicators of five regions in Tangbai River Basin from 2000 to 2018, we analyzed quantitatively the relation between water use benefits and water use using the fixed effect model through regression calculation with the cross-section weighted least square method and the seeming unrelated regression. We obtained the water use benefit functions for the whole basin and for different industries in the basin. Our findings suggest that the relation curve of per capita added value of farming, forestry, animal husbandry and fishery against agricultural water use displays an inverted N-shape; per capita industrial added value increased with industrial water use; the relation curve of per capita GDP against total water use displayed a U-shape. The water use and economic benefits of different industries varied remarkably among different regions, hence calling for varied water use strategies. The research findings offer reference for water management and water resources allocation in Tangbai River Basin.

Key words: water use benefit function, Environmental Kuznets Curve (EKC), economic benefits, seeming unrelated regression, cross-section weighted least square method, Tangbai River basin