Who pays for water scarcity? Evaluating the welfare implications of water infrastructure investments for cities

Hua Zhong (), Michael H. Taylor (), Kimberly Rollins, Dale Manning and Christopher Goemans
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Hua Zhong: Beihang University
Michael H. Taylor: University of Nevada, Reno

The Annals of Regional Science, 2019, vol. 63, issue 3, No 9, 559-600

Abstract: Abstract Continued provision of low-cost municipal and industrial water is anticipated to be a challenge for cities in the coming decades. To address this, many are considering large-scale infrastructure projects to expand their water supply. In this article, we develop a general equilibrium model to evaluate the economy-wide distributional impacts of water infrastructure projects. The model framework includes a regulated water utility with a cost-recovery mandate and captures the trade-off between the immediate costs of financing infrastructure projects and the long-term costs that water scarcity imposes on the regional economy. We apply the model to an on-going water infrastructure project in Las Vegas, Nevada.

JEL-codes: L95 Q25 R13 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s00168-019-00943-w

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