In this study, the comparative advantage of bottled drinking water production in Khorasan province was investigated using dynamic reconfiguration connector(DRC) index and policy analysis matrix (PAM) in 2011. Data was collected from the site of External Trade Statistics Yearbook, FAO and annual foreign trade database. The nominal protection coefficient showed that there was an indirect tax on producers in all sectors. The NSP index was positive in all regions. Result supports this idea that Khorasan has comparative advantage in bottled drinking water production. When yield increase and production cost decrease, bottled drinking water production is useful in Khorasan province.
Key words: Comparative advantage, policy analysis matrix, drinking water,Khorasan.
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