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Who pays for water scarcity? Evaluating the welfare implications of water infrastructure investments for cities

Author

Listed:
  • Hua Zhong

    (Beihang University)

  • Michael H. Taylor

    (University of Nevada, Reno)

  • Kimberly S. Rollins

    (University of Connecticut)

  • Dale T. Manning

    (Colorado State University)

  • Christopher G. Goemans

    (Colorado State University)

Abstract

Continued provision of low-cost municipal and industrial water is anticipated to be a challenge for cities in the coming decades. To address this, many are considering large-scale infrastructure projects to expand their water supply. In this article, we develop a general equilibrium model to evaluate the economy-wide distributional impacts of water infrastructure projects. The model framework includes a regulated water utility with a cost-recovery mandate and captures the trade-off between the immediate costs of financing infrastructure projects and the long-term costs that water scarcity imposes on the regional economy. We apply the model to an on-going water infrastructure project in Las Vegas, Nevada.

Suggested Citation

  • Hua Zhong & Michael H. Taylor & Kimberly S. Rollins & Dale T. Manning & Christopher G. Goemans, 2019. "Who pays for water scarcity? Evaluating the welfare implications of water infrastructure investments for cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(3), pages 559-600, December.
    • Handle: RePEc:spr:anresc:v:63:y:2019:i:3:d:10.1007_s00168-019-00943-w
    DOI: 10.1007/s00168-019-00943-w
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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