ABSTRACT
From an economic viewpoint the problem of drought at first glance appears to be yet another "shortage crisis" similar to the energy crisis and the materials shortage so typical of the 1970's. If drought impact is confined to the individual level economic policy should be "supply-oriented". The historical record of the Great Plains in particular should therefore be helpful in assessing the appropriate spatial level of analysis for drought economic impact research. Increased agricultural prices resulting from World War I further helped limit the economic impact of drought. Impact was confined to the individual farmer, mainly in terms of reduced physical output. Based on historical trends as well as on our assessment of the current situation of the domestic economy it is clear that to gauge the economic impact of drought we need models of economic activity at the individual agriculturist's level and at the regional level.
