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<br />the land. The rest of returns to land and management becomes a component of <br />final consumer demand in the region. <br /> <br />Each state has constructed a set of transaction tables which display the <br />interrelationship between different industry sectors and final demand. The <br />states have determined what portion of the purchase and sales between indus- <br />tries occur within the Ogallala portion of the state, and which transactions <br />occur across the Ogallala regional boundary. Using this information, the <br />state I/O transaction tables show the trade relationships between industries <br />and across the regional boundary for the base year (1977). <br /> <br />To estimate the regional economic impacts of a water management strategy <br />over the forty year period of the study, the I/O transaction tables are first <br />used to project overall economic activity and economic activity in each sec- <br />tor in the Baseline condition. The solution is reached by an iterative pro- <br />cess which reflects the constraint imposed on economic activity by production <br />in the primary resource sectors (agriculture and oil and gas production). <br />Initially, a level of final demand is projected. This level is estimated <br />based on the national economic growth projected in the INFORUM model and the <br />changes which this would imply in regional economic activity. This is then <br />tested against the amount of agricultural activity and oil and gas production <br />which will occur in each study year under the management strategy. Final <br />demand estimat~s are then revised until the requirements for regional agri- <br />cultural production are consistent with the projections of agricultural out- <br />put from the LP models. Final demand must also be adjusted to reflect income <br />derived from projected energy production. Inputs required for this level of <br />agricultural production are projected from estimates in the LP farm <br />enterprise models of the amounts purchased by farmers from each industry. <br /> <br />Using this method, the activity in each economic sector in the Ogallala <br />subregion of the state is projected. Constraints imposed by limits on agri- <br />culture and energy production are carried through the entire economy. <br />Changes in relationship between economic sectors which occur as a result of <br />technological changes projected in the INFORUM estimates are also incor- <br />porated in these models. Using historic relationships between output and <br />employment in each industry, and projected levels of productivity growth <br /> <br />A-14 <br />