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.
Assessing the Macroeconomic Impact of Water Supply Restrictions Through an Input–Output Analysis
| Publications| 15/04/2011
Water Resources Management
Freire González, J. (2011) Assessing the Macroeconomic Impact of Water Supply Restrictions Through an Input–Output Analysis. Water Resources Management, Vol. 25, 9, p. 2335-2347.