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Show high intake per dollar of output, but it may buy ( directly and indirectly) from other sectors which do have high water intake per dollar of output. Consequently, when we are concerned about the effect of allocating additional water to a given sector, the rise in its output will result in an increase in the demand for water much larger than what one might infer from looking only at the direct water intake coefficients. The first marginal value concept we define for income and employment is somewhat analogous in nature to the conventional static ceteris paribus concept. It is the direct effect on the household income and employment originating in a given industrial sector resulting from an increase in the amount of water intake to that sector. In input- output algebra, if hQj is the household income originating from the jth sector per dollar of its gross output, and n^ is the amount of employment per dollar of output of the j" 1 sector, then the ratios IIQJ/ VH and noi/^ 2i are' resPectively, the amount of household income per unit of water intake and the amount of employment per unit of water intake. These coefficients -- labelled R. 2 and R3, respectively-- are shown in Table 2. In a linear input- output model, these ratios are independent of scale, so we can use them as surrogated marginal value ( in terms of income and employment) product concepts." lzIt is to be noted that all three of our marginal value concepts in terms of income are gross concepts in that they give the joint marginal value imputable to water, labor and other primary factors. As we show later, with a Leontief production function, if all the factors are limitational factors, it is the joint marginal value product that is being derived when we estimate the effects of final demand being expanded. 23 |