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<br />" <br /> <br />.1.- <br /> <br />-' <br /> <br />Economic Analysis of Water Use in COlorado's, Economy <br />II. Nature and Scope of Project: <br /> <br />1. fTitle: <br /> <br />A. Objectives: <br /> <br />1. To determine the economic interrelationships among the major <br />sectors of Colorado's economy. <br /> <br />2. To estimate future output of specific sectors and determine the <br />'impact of these output changes on all sectors of Colorado's eco- <br />nomy. <br /> <br />3. To delineate the economic importance of water resources on major <br />sectors of Colorado's economy. <br /> <br />4. To estimate the impact of future output levels on the demand for <br />water and to examine possibilities for substitution between water <br />and other factors in an optimizing framework. <br /> <br />B. Procedure: <br /> <br />One of the major problems of economic development is to determine the <br />impact of planned activities on the major sectors of the state's eco- <br />nomy as well as on the entire state,' economy. Research economists use <br />several methods of analysis in an attempt to answer this problem. <br />One of Dlese methods is called interind~stry or in~ut-output analysis. <br /> <br />, Inp~t-output analysis will be the primary method used to accomplish <br />the objectives. In order to more clearly explain the procedure, a <br />brief example of input-output analysis will be presented. The first <br />two decisions which must be made in an input-output analysis are to <br />determine (1) the time period to be studied, and (2) the composition <br />of the sectors to be included. The second decision is important in <br />1',"\ order to determine (a) the current economic structure of the state, <br />~ and (b) the impact of planned activities ,on this structure. <br /> <br />~ An economy is conceived as consisting of a number of homogeneous pro- <br />ducing industries or sectors. 1hese sectors eng'age in 'trade with <br />each' other and also sell goods for final consumption. Sectors whose <br />demand for goods is a re'sul t of personal tastes or political decisions <br />,are called independent or autonomous sectors. These independent sec- <br />tors represent final demand. Households" government and exports are <br />usually placed in the final demand category. Even though households <br />are usually included in final demand, 'they can also be considered an <br />intermediate sector in that they buy products and supply labor. <br /> <br />Objectives One and Two <br /> <br />The first information needed in an <br />of goods (in dollars) between the <br />region are presented in Table 1. <br />made between processing and final <br /> <br />input-output analysis is the flow <br />sec.ors. Hypothetical data for a <br />For simplicity a distinction is not <br />demand sectors. <br />