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<br />N <br />00 <br />o <br />CJt <br /> <br />SECTION 4 <br /> <br />COST-EFFECTIVENESS ANALYSIS <br /> <br />INTRODUCTION <br /> <br />There is probably no other means as commonly used or as <br />widely accepted for evaluating the merits of a water resource <br />system as its economic attributes. Although water resources <br />can be classified primarily as public commodities, significant <br />influences on pricing and management are due to water uses in <br />the private market. In most states, water is not legally <br />"owned" by an individual other than the state, but rights can <br />be obtained' for the use of water by individuals. However, when <br />the legal interpretation implies that the water is tied to the <br />land and capnot be transferred, then the value of the land is <br />enhanced by its water right. These cases give water a market <br />value obtaipable by a right holder even when the resource is <br />administered as public property. As in the case of grazing <br />privileges on public lands, the pricing is usually lower than <br />that obtainable in the private economy. As a consequence, right <br />holders are often reluctant to accept changes to improve their <br />use efficiency and thereby reduce their water requirement. <br /> <br />Reservoirs, diversion works, and distribution systems aid <br />management uf water which tends to remain fixed in spatial <br />distribution but randomly distributed with time. These facili- <br />ties, without which water use would be constrained to local <br />utilization, allow wider water use between adjoining watersheds <br />and along a river system. However, the diversion of waters for <br />most uses create externalities (downstream water quality <br />detriments, for example) which are usually not considered by <br />local planners. Thus, maximum economic efficiencies are only <br />achieved when the economic evaluations assume a regional <br />interpretation. <br /> <br />This section deals with an optimization procedure intended <br />to determine the most cost-effective means of managing salinity <br />from non-point agricultural sources. The interpretation is on <br />a regional ~cale so that economic efficiency is addressed. <br /> <br />Optimization Criterion <br /> <br />Optimization is generally a maximization or a minimization <br />of concise numerical quantities reflecting the relative <br /> <br />7 <br /> <br />'~r~, <br /> <br /> <br />Al<,..' <br /> <br />t:~ <br /> <br />..,:.;.ii.. <br /> <br />.,--" '-' <br />