OCR Text |
Show complete marginal value of water to a given sector, but the complete marginal value of water to the state as a whole, depending upon which sector initiates the expansion. It, therefore, contains more information than the conventional concept-- the use of which we have taken issue. The important point to keep in mind concerning our concept is that the initiating sector is expanded to meet an anticipated increase in the final demand for its product. The subsequent expansion of all the other sectors and of the initiating one is for supplying the endogenous demands which are generated by the initial expansion. Unless we close the system to also capture the induced effects, we are, in effect, assuming no further increase in any final demand item * The size of the additional income and employment that the economy ends up generating relative to a given additional amount of water intake depends, therefore, upon which item in the final demand vector is expanding. The coefficients give the potential value1" of water intake under alternative uses. Thus, if all final demand items were tending to expand and it were felt that water will be a constraint, the list of marginal values in terms of income, for example, gives the water administrator a priority grouping. It serves as a basis for determining beforehand which expected demands for additional water he should be prepared to satisfy first. What water is left will go to satisfying the demands which have a lower marginal value, and so on, until ^ Actually, it is the potential joint marginal value as previously indi - cated-- not the net marginal value. 36 |