The economics of water allocation

Abstract

This paper sets out the pure theory of resource allocation and its application to the water resource. The study of economics works from a central body of theory which the practising economist modifies in the light of any particular situation, It is important to note that the objective function in any analysis needs to be clearly stated before the doctrine can be applied. If the assumptions upon which an analysis is being made are not explicit nor fully understood then it is likely that the analysis itself will be faulty and unnecessary debate will follow. The theory of resource allocation is pure theory and some of the modifications which are required in practice have already been outlined in an introductory paper. No further apology for the unrepentant text book approach in what follows should be required,