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Measuring direct and indirect costs of land retirement in an irrigated river basin: A budgeting regional multiplier approach
Department of Agricultural Economics, University of Idaho, Moscow, Idaho, USA
Department of Agricultural Economics, Washington State University, Pullman, Washington, USA
Economic Modeling Specialists Inc., Moscow, Idaho, USA
Department of Agricultural Economics, Washington State University, Pullman, Washington, USA
This analysis addresses three important conceptual problems in the measurement of direct and indirect costs and benefits: (1) the distribution of impacts between a regional economy and the encompassing state economy; (2) the distinction between indirect impacts and indirect costs (IC), focusing on the dynamic time path unemployed resources follow to find alternative employment; and (3) the distinction among the affected firms' microeconomic categories of fixed and variable costs as they are used to compute regional direct and indirect costs. It uses empirical procedures that reconcile the usual measures of economic impact provided by input/output models with the estimates of economic costs and benefits required for analysis of welfare changes. The paper illustrates the relationships and magnitudes involved in the context of water policy issues facing the Pecos River Basin of New Mexico.
Published 2 August 2002.
Citation: (2002), Measuring direct and indirect costs of land retirement in an irrigated river basin: A budgeting regional multiplier approach, Water Resour. Res., 38(8), 1129, doi:10.1029/2001WR000459.
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