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Physical water use and water sector activity in environmental input-output analysis

Author

Listed:
  • Oluwafisayo Alabi

    (Department of Economics, University of Strathclyde)

  • Max Mundy

    (Welsh Economy Research Unit (WERU), Cardiff University)

  • Kim Swales

    (Department of Economics, University of Strathclyde)

  • Karen Turner

    (Department of Economics, University of Strathclyde)

Abstract

This paper uses input-output accounting methods to identify the direct, indirect and induced physical demand for water. Previously the seminal work by Leontief (1970) has been employed to motivate a fuller account of issues related to sectors that generate and sectors that clean/treat polluting outputs (Allan et al 2007). The present paper extends this approach to deal with sectors that use a natural resource and the sector(s) that supply it. We focus on the case of water use and supply and a case study for the Welsh regional economy. The analysis shows how the proposed method, using both the quantity input-output model and the associated price dual, can be used to consider economy wide implications of the deviation between actual expenditure on the output of the water sector and actual physical water use. The price paid per physical amount of water appears to vary greatly amongst different uses. This may occur for various reasons. We argue that such analysis and information is essential for policy makers and regulators in understanding the demands on and supply of UK regional water resources, their role in supporting economic expansion, and can ultimately inform water sustainability objectives and strategies.

Suggested Citation

  • Oluwafisayo Alabi & Max Mundy & Kim Swales & Karen Turner, 2016. "Physical water use and water sector activity in environmental input-output analysis," Working Papers 1612, University of Strathclyde Business School, Department of Economics.
    • Handle: RePEc:str:wpaper:1612
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Water resources; Full Leontief environmental model; input-output; Multipliers; Wales;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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