Journal
WATER RESOURCES MANAGEMENT
Volume 25, Issue 9, Pages 2335-2347Publisher
SPRINGER
DOI: 10.1007/s11269-011-9811-4
Keywords
Input-output analysis; Water scarcity; Aggregate production functions; Water restrictions; Macroeconomic impact
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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.
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