Economic Analysis of Critical Habitat Designation in the Colorado River Basin for the Razorback Sucker, Humpback Chub, Colorado Squawfish, and Bonytail April 1994

• Description: Economic Analysis of Critical Habitat Designation in the Colorado River Basin for the Razorback Sucker, Humpback Chub, Colorado Squawfish, and Bonytail April 1994
• State: CO
• Basin: Colorado Mainstem
• Date: 4/1/1994
• Title: Economic Analysis of Critical Habitat Designation in the Colorado River Basin for the Razorback Sucker, Humpback Chub, Colorado Squafish, and Bonytail April 1994
• Water Supply Pro - Doc Type: Report/Study

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 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 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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