Impacts of Water Reallocation : A Combined Computable General Equilibrium and Recreation Demand Model Approach

To date, the regional economics literature has neglected to combine a county-level dynamic computable general equilibrium (CGE) model with a recreation demand model to analyze the temporal effects of reallocating water from agriculture to recreational use. This study begins to address this weakness in the literature by considering water reallocation issues in rural Nevada. By combining a recreation demand model with a CGE model, this study analyzes the policy effects on both the agricultural sectors and the recreation-related sectors. Model results show that the increase in non-agricultural output does not offset the reduction in agricultural output due to water withdrawal