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Show Three different marginal value concepts are defined for both the household income and the employment criteria. These definitions are related, and represent successive degrees of interdependency. The third definition is the most comprehensive for it reflects the total effect, in a general equilibrium context, of a change in water allocation policy. It is the one we end up using. Before developing these definitions, we give in Table 1 the direct water intake coefficients used to generate the results of this study. The first three columns show: ( 1) V]_, water intake per dollar of output; ( 2) V2> water intake per employee year,* and ( 3) V3, water intake per dollar of household income.^ Column 4 of the table gives the water intake vector for 1963. This vector is, in effect, the ex post water demand vector. Rankings have been provided for each column category to show the relative size of sector entries within and between categories. It is also to be noted that these direct coefficients can be misleading. The fact that a given sector has a small water intake coefficient offers no guarantee that if the sector's output were to increase by one dollar, the increase in total water demand for the state as a whole would be limited only to the amount given by the coefficient. An increase in the output of one sector will usually result in increases in the outputs of many sectors-- all those who sell directly to the sector, and all those who sell indirectly to the sector by selling to those who, in turn, sell directly to the sector. One sector may not have a H- See Appendix for a discussion on the sources and quality of the data used in this study* 21 |