8169a

• UCREFRP Catalog Number: 8169a
• Author: Brookshire, D. S., M. McKee and G. Watts.
• Title: Draft Economic Analysis of Proposed Critical Habitat Designation in the Colorado River Basin for the Razorback Sucker, Humpback Chub, Colorado Squawfish, and Bonytail.
• USFW Year: 1993.
• USFW - Doc Type: \
• Copyright Material: NO

Section 4: The Economic Modeling Framework
A. Overview
Two types of economic effects are of interest when considering the economic impacts of
critical habitat designations: regional economic impacts and national economic efficiency
impacts. Regional economic impacts refer to the impact of the proposed critical habitat
designations on specific geographic regions, such as States or other sub-regions of the
country. Frequently, regional economic impacts effect a transfer of resources from one region
to another. For example, if one State in the Basin increases its consumptive use of Colorado
River water, another State may have to forego some of its use of Colorado River water.
Thus, a positive regional impact to one State can be a negative impact to another, and vice
versa.
Regional economic impacts in this study were analyzed using input-output models which
organize the basic accounting relationships that describe the production sector of the
economy. The input-output method starts with the assumption that all sectors of the economy
are tied together by virtue of economic relations called linkages, and the production of a good
or service can be described by a recipe whose ingredients are the outputs of the other sectors
of the economy. The primary inputs are labor, capital, and other raw resources. Through its
multiplier analysis, the input-output model is capable of generating estimates of the changes
in output for sectors, changes in employment, and changes in income due to species listing
and proposed critical habitat designation. The models report the total impacts that result from
the interactions among the sectors of the economy.
The computable general equilibrium model analyzes resource reallocations (e.g., changes in
river flows as represented by increased or decreased hydroelectric generation) in a manner
such that the net effects, not just the total effects, are calculated. Given this capability, the
CGE is able to estimate net national efficiency impacts at the national level.
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