| OCR Text |
Show equal the combined marginal " cost" of Di? A-- + yr£ L , measured in terms of dDi dDi income. If we take ( 7) and divide it be SiL we obtain: dDi ( S) dY/ dDj B x + ydC/ dPj w dW/ dDi dW/ dDi or ( 9) £ L = A+ y^ S- > dWi dWi where the left hand term of ( 9) gives the total increase in income ( welfare) associated with a total increase in water - - both increases being generated by the direct and Indirect effects on income and water brought about as a result of an increase in the demand for the i" 1 final demand item* In our water study, we call this left hand term the ( joint) marginal value of water in terms of income ( MVPi). It is, in essence, a pari passu marginal value concept with respect to all primary ( water, land, labor) and intermediary ( the gross outputs) factors, and this accounts for its " joint" nature. ^ it is a ceteris paribus concept, however* with respect to all the other final demand items* The right hand term of ( 9), -- r- » gives the marginal cost in terms of resources of supplying water, and dWi y" C gives it in terms of income. If the marginal costs 2~ L were all zero, our equilibrium conditions ( using dWi our new notation MVPi) would be: ( 10) MVPi * MVP2 = . . . = MVPn = X • ^ The third section of this paper explains the joint pari passu nature of this concept* 13 |
