gnomic Consequences of Interbasin Water Transfer

A model to measure the economic efficiency effects of interbasin water transfer has been developed. It is capable of accommodating multiple uses, values in transit, and production interdependencies. By ac- counting for regional direct and indirect costs and pecuniary externalities, regional income redistribution impacts of interbasin water trans- fer schemes can be estimated. The marginal value product of an acre-foot of water used on irrigated cotton and .91 acre of land was esti- mated to be $33.32. In any complete analysis of water transfer projects, regional in- come distribution consequences of water transfer projects must be considered in addition to economic efficiency effects. Regions and people benefiting may be useful in predicting political effects of water transfer There is need . . . to spell out quite clearly, as separate questions, the efficiency considerations involved in each resource development project and its income redistributive consequences. With reference to neither criterion can the economic analyst say which is best, because doing so involves value judgments as much if the criterion is "most efficient" as when it is "most equalitarian." But, for the efficiency criterion he can determine a cardinal measure of preferredness, subject to restrictive assumptions, whereas for the income redistributive consequence he can do no more than describe it. Both are, however, equally the proper domain of economic analysis (Kelso, 1964, p. 63).