A Multi-Regional Input-Output (MRIO) Analytical Framework for Assessing the Regional Economic Impacts of Rising Water Prices

Understanding the regional economic implications of rising water and wastewater services is important, because these services are household necessities. To date, however, there are few (if any) studies examining the link between water costs and indicators of economic vitality such as jobs, output, and regional income. To advance work on this particular topic, this paper proposes a novel methodology that estimates changes in household spending information from the Consumer Expenditure Survey (CES) for a particular change in water prices. This vector of final demand changes is then linked to multi-regional input-output (MRIO) models to estimate the regional economic impacts associated with changes in consumer spending patterns. To demonstrate this methodology, three water price increase scenarios are derived, and associated changes in final demand estimated.