| Abstract: | The concept of water conservation has increased in importance because of revisions in the rules and procedures for performing cost-benefit analyses of federal water projects. These revisions include a requirement that nonstructural and water conservation measures be incorporated into economic assessments of projects. Project analyses will now proceed as if water supplies were allocated “most effectively,” that is, to their highest valued uses. A related requirement provides that the net benefits of any project should now be valued using willingness to pay measures. A specific cost-benefit methodology accommodating the revisions is constructed and discussed. Informational requirements for applying this methodology are identified. In addition to being consistent with federal mandates, this technique offers important advantages over the traditional “requirements” approach to water supply planning. |
