| OCR Text |
Show III. PART ONE OF THE WATER STUDY As previously stated, this part of the water study was concerned with developing two sets of value criteria to form a basis for examining the allocation of water intake. Rather than judge the efficiency of the existing allocation of water or state categorically what we would consider to be an optimum use of any future additional water intake for the region, we address ourselves to the problem of determining, by the use of our value criteria, what will be the effect on total statewide household income and employment if the economic expansion of a particular industrial sector is supported by making more water available directly to that sector and indirectly to all the sectors whose demand for water intake will increase as a result of their interdependency with each other's level of economic activity. The implicit assumption here is that after making more water available to a sector all the other economic determinants of the sector's expansion will also be forthcoming, so that the allocation does in fact result in additional income and employment for the state. l^ We lack at this time a useable set of marginal cost of delivery coefficients to compare with the corresponding marginal value product coefficients. Also, there is a methodological problem involved here over the use of the mar - ginal value concept as it is usually defined. If the existing allocation of water is judged to be inefficient in terms of the normative rule that an optimum exist when the net marginal value product equals the marginal cost of delivery for every use and user, the task of trying to correct for this misallocation ( also considering the cost of correction) involves shifting the pattern of water use. To do this, we need to know the kind of marginal value coefficients and mar * ginal delivery cost coefficients which reflect all the interdependent effects of a change in water allocation. |
