Water use efficiency

The development and use of water resources affect a number of societal concerns including income distribution, regional development, and the level of total national product. Since policy changes designed to alter water use are likely to have varying qualitative effects on some of these matters, and since they are seldom, if ever, defined such that quantitative comparisons can be made among them, abstraction is essential for examining the efficiency of water use. The most common abstraction adopted by economists is to evaluate efficiency in terms of maximizing the present discounted value of net national income at market prices over some time period. This section examines some of the advantages and limitations of this definition of efficiency and presents the conditions which must be satisfied to achieve such an efficient water use. Then, the second section evaluates current water use, government policies, and regulating institutions by the extent to which they impede or promote such an efficient water use. And the third section evaluates alternative means of improving water use efficiency in Cuyo. This third section reintroduces other societal concerns, in particular, income distribution and risk avoidance objectives in evaluating policy alternatives. ¹