Measuring Economic Benefits for Water Investments and by Robert A. Young

By Robert A. Young

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Additionally, any of the numerous techniques from the quantitative toolkit of applied microeconomics may be used. The applicable techniques range from survey research to econometrics to optimization modeling. This monograph does not aspire to reflect all of the ramifications of the various concepts and analytical techniques which can be brought to bear on estimating economic benefits of water related investments or policies. However, the intended scope is to provide enough conceptual framework and methodological detail for a persistent reader to understand the various potential applications and the strengths and limitations of each, together with sufficient references to the relevant literature to aid the user to find further specifics, if needed.

Some apply to more than one case. For intermediate good uses of waterprimarily in crop irrigation and industrial activitiesmodels of the profit-maximizing firm are employed. The Page xi simplest of firm models employ a budgeting approach (often facilitated by spreadsheet software). The imputation process involves subtracting forecasted costs of nonwater inputs from forecasted revenues. The remaining or residual surplus of revenues over nonwater costs is imputed as the benefit or value of water to the firm.

Easter, David Hanrahan, Richard Reidinger and Dale Whittington provided helpful suggestions on earlier drafts. The monograph typesetting was prepared by Patricia Noel. Page ix Executive Summary Background, Objectives and Scope Water resources provide important benefits to humankind, both commodity benefits and environmental values. For physical, social and economic reasons, water is a classic nonmarketed resource. Even for commodity uses, market prices for water are seldom available or when observable, often are subject to biases.

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