Title: A Regional Study
Full Citation
Permanent Link: http://ufdc.ufl.edu/WL00003199/00001
 Material Information
Title: A Regional Study
Physical Description: Book
Language: English
Publisher: The Conservation Foundation
Spatial Coverage: North America -- United States of America -- Florida
Abstract: Richard Hamann's Collection - A Regional Study
General Note: Box 12, Folder 11 ( Conservation Foundation - Symposium Papers on Water Allocation in Eastern U. S. - 1956 ), Item 52
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
 Record Information
Bibliographic ID: WL00003199
Volume ID: VID00001
Source Institution: Levin College of Law, University of Florida
Holding Location: Levin College of Law, University of Florida
Rights Management: All rights reserved by the source institution and holding location.

Full Text

yielding a lower regional net product is associated with such low income

outflows that net income to the region is greater in the latter case than

in the former. Under these circumstances there is a conflict between policies

designed to maximize national welfare and policies designed to maximize

regional welfare. The conflict would disappear if we could assume a highly

mobile population, but in many instances this assumption would be contrary to


III. A Regional Study

An economic study of regional, or, for that matter, national water policy

requires several measurements: the value of water in different uses; gross

state product, net state product, and income payments under different assumed

patterns of water use. The smaller is the area the easier it is to observe

a change in gross product with a change in water use; at the same time the

range in probable error of gross product probably widens.

For goods and services sold in a competitive market, variation in

value according to use presumably is not a significant question. Value is

the same for all uses at the margin of utilization, an outcome of shifting

the resource among all uses until it no longer pays to increase one use at

the expense of another. Where this shifting process is frozen by law,

technology, market control, or custom, the equalizing process fails to

take place, and the possibility of variations in the marginal value of

water among different uses becomes a purposeful object of inquiry. In

pursuit of this inquiry, the investigator is confronted by a wide variety

of questions. For example:

1. What change would occur in the value of crops if the supply of

water for a given region were increased by one acre-foot per

year? What would be the effect on crop production and the

region's economy it water supplies were reduced?


2. What is the minimum flow in second/feet that will maintain a

given density of fish population? What would be the effect on

fish population of increasing the flow by designated amounts?

How would this help the recreation industry?

3. What are water needs for the maintenance of ground cover in

designated water sheds? What economic advantages would accrue

from consumption of additional supplies of water for this purpose?

4. What potential industrial and municipal water needs can be

assigned to the region on the basis of expected industrial and

population growth? What would be the probable impact on the

region's economy if realization of these developments were

prevented by rigidity in the allocation of water? What would be

the effects of substantial increases in water supplies?

Answers to these questions would reveal average values of water for

various uses as well as provide a rough measure of the rate at which the

marginal value of water diminished in various uses. The significant marginal

values for public welfare are not "marginal revenue products," but "market

values of the marginal product." Whether or not the latter diverge from

the former depends on the degree of monopoly power possessed by the seller

of the product and the manner in which the monopoly power is exercised by

way of price policy. It is not likely, however, that the degree of

divergence can be established by anyone outside the industry.

From the foregoing, it can be seen that the core of the problem goes

beyond measurement of water values. Ultimately we want net product associated

with various patterns of water use.


Economic models can be constructed, each constituting a different

pattern of water consumption. For example, one pattern of water use,

involving a total of 600,000 acre/feet of water might be as follows:
Irrigation ............... ............................... 490,000
Depletions by soil conservation structures..................... 20,000
Minimum supplies reserved for fish and wild-life habitat....... 30,000
Municipal use, industrial.................................... 20,000
Municipal use, residential ................................... 40,000

Total..... 600,000

Suppose this pattern of water use actually prevails. It is possible to

estimate the value of gross product, net product and income payments, assuming,

of course, that data on the type of crops, the nature of industrial processes,

and the total employed labor force and their industrial distribution are

available. Other patterns of water use that are potentially sound might

then be considered. The following, assuming that industry location studies

indicate its possibility, reflects more industry and less irrigation:

Irrigation......ot .... ................... .... ........... ....... 350,000
Depletion by soil conservation structures .................... 40,000
Fish and and wild-life habitat..... ............................ 50,000
Municipal use, industrial .................................... 70,000
Municipal use, residential................. ................. 90,000

After calculating estimated gross and net product for this pattern of use,

the two could be compared in other terms: probable income distribution,

comparative stability of earnings, level of employment per unit of water

consumed, and per capital income payments to individuals.

In constructing the potential variants of an economy, the

present level of technology and knowledge of natural resources impose

reasonably well-defined limits on the imagination of the model builder.

It is less clear whether the status quo in social, economic, and political

affairs should be accepted as limiting the variety of models that can be

constructed or as imposing a temporary condition to be overridden in the


search for maximum product: the division of water by interstate compact,

Indian water rights, riparian rights or rights acquired by appropriation

specific statutory limitations on the acquisition of rights for certain

uses, and so on. Also, what degree of population mobility can be assumed,

geographic and occupational? How will growing urbanization affect not only

urban demands for water but non-urban as well, e.g., recreational uses?

IV. Some Problems of Method

In making estimates of product and income payments the analysis would

follow the guides indicated by a market price system. Agricultural economists

would estimate agricultural output and economic geologists would estimate

mineral production based on projected demand, costs, and availability of

water. With data on potential agricultural and mineral raw materials in

hand, supplemented by projections of population, markets, and exogenous

factors such as federal government activity, it would be possible to estimate

potential industrialization, urbanization, municipal and industrial water

uses, and the associated gross and net products. Recreational values of

fish, wildlife, and forests would be measured not by what anglers and

campers would pay, but what their demands represent in terms of net product.

An imbalance or lack of parallelism is introduced in the data to the extent

that publicly supplied recreational resources

No F 13

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