9391

• UCREFRP Catalog Number: 9391
• Author: Watts, G., W. R. Noonan, H. R. Maddux and D. S. Brookshire.
• Title: The Endangered Species Act and Critical Habitat Designation
• USFW Year: 1997.
• USFW - Doc Type: An Integrated Biological and Economic Approach.
• Copyright Material: NO

determined by the application at hand.

A 19 sector model was constructed with the benchmark data set for 1982. The outputs of the 19
sectors of the economy are produced with inputs oflabor, capital, land (where applicable), and an
intermediate good. The intermediate good is a composite commodity with the weights
determined by the input-output coefficients from the baseline data set. The production function
is defined as a constant returns Cobb-Douglas over the primary factors:

X D = A L a'L K a,x
i ; ; ;

(this is the expression for the non-agriculture sectors) where a;l., + a,K = I and A; is a constant.

The primary factors account for the output net of that explained by the intermediate good and the
imports used in that intermediate good. This residual is labeled the unit value added. and it is
defined as:

VA
P,. = P- r.p .a..- t.- M
, iii' , ,

where the second term represents the value of the intermediate input to good 1, I, the indirect
taxes, and M; the imports used to produce good 1. This unit value added is attributed to the labor
and capital (also land) inputs from the region. Profit maximization requires that these factors be
hired to the point that their price equals their marginal value added:

[ DJ
VA ax;
P; aL; = a;LW

The factor markets clear when this condition is met and when the sum of labor (capital, land)
demanded equals the sum supplied.

There are three households in the economy classified as High Income, Middle Income, and Low

...-
.I

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