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Economic impact of alternative water policy scenarios in the Spanish production system: An input-output analysis

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  • Llop, Maria

Abstract

This paper analyses the economic impact of alternative water policies implemented on the Spanish production system. The methodology comprises two versions of the input-output price model: an average cost formulation and a mark-up formulation. The input-output framework evaluates the impact of the various water policy measures on production prices, consumption prices, intermediate water use and private real income. The results show that a tax on the water used by sectors considerably reduces intermediate water consumption and increases production and consumption prices. On the other hand, according to Jevons' paradox, improvements in technical efficiency, which lead to a reduction in the water requirements of all sectors and an increase in water production, raise water consumption. The combination of a tax on the water used by sectors and an improvement in the technical efficiency of water in the production sphere takes the pressure off prices and significantly reduces intermediate water consumption.

Suggested Citation

  • Llop, Maria, 2008. "Economic impact of alternative water policy scenarios in the Spanish production system: An input-output analysis," Ecological Economics, Elsevier, vol. 68(1-2), pages 288-294, December.
    • Handle: RePEc:eee:ecolec:v:68:y:2008:i:1-2:p:288-294
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    More about this item

    Keywords

    Water use Water policy Water taxation Input-output analysis Leontief price model;

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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