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Assessing the Macroeconomic Impact of Water Supply Restrictions Through an Input–Output Analysis

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  • Freire-González, Jaume

Abstract

Water supply restrictions due to droughts generate significant costs to many economic agents. Although these costs are difficult to assess, this article presents a methodology to quantify, from a general equilibrium perspective, the macroeconomic impact of water supply restrictions through the estimation of aggregate production functions that include water consumption by sectors. Simulations with an Input-output model suggest a loss of 0.34% of GDP in the case of modest restrictions on the water supply and 2.8% in the case of more extreme restrictions for 2005 for the Catalonia region in Spain.

Suggested Citation

  • Freire-González, Jaume, 2011. "Assessing the Macroeconomic Impact of Water Supply Restrictions Through an Input–Output Analysis," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 25(9), pages 2335-2347.
    • Handle: RePEc:zbw:espost:314768
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    1. Mas Ivars Matilde & Uriel Jiménez Ezequiel & Pérez García Francisco, 2005. "El stock y los servicios del capital en España (1964-2002). Nueva metodología," Books, Fundacion BBVA / BBVA Foundation, edition 0, number 201147, October.
    2. Maria Berrittella & Katrin Rehdanz & Arjen Y. Hoekstra & Roberto Roson & Richard S.J. Tol, 2006. "The Economic Impact Of Restricted Water Supply: A Computable General Equilibrium Analysis," Working Papers FNU-93, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2006.
    3. Alvaro Calzadilla & Katrin Rehdanz & Richard S.J. Tol, 2008. "The Eonomic Impact Of More Sustainable Water Use In Agriculture: A Computable General Equilibrium Analysis," Working Papers FNU-169, Research unit Sustainability and Global Change, Hamburg University, revised Dec 2008.
    4. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
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    1. Iban Ortuzar & Ana Serrano & Angels Xabadia & Roy Brouwer, 2025. "Balancing Efficiency and Inequality in a Non-Linear Multi-Regional Water Allocation Optimization Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(3), pages 761-794, March.
    2. Tendai Gwatidzo, 2025. "Analysing the impact of climate change on economic growth in the SADC region a synthetic control approach," Working Papers 11091, South African Reserve Bank.
    3. Ortuzar, Iban & Serrano, Ana & Xabadia, Àngels, 2023. "Macroeconomic impacts of water allocation under droughts. Accounting for global supply chains in a multiregional context," Ecological Economics, Elsevier, vol. 211(C).

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