Date of Award:

1-1-1976

Document Type:

Dissertation

Degree Name:

Doctor of Philosophy (PhD)

Department:

Economics and Finance

Advisor/Chair:

Allen LeBaron

Third Advisor:

Water Resource Management, Weber Drainage Basin, Utah

Abstract

The Weber Basin Water Conservancy District is a state institution, but its primary function is collecting money for the U.S. Bureau of Reclamation, to pay for the Weber Basin Project. Ditferent classes of water users pay markedly different fees for identical Project services. More than half of the water developed by the Project is not used consumptively, yet supply facilities continue to be built in the Basin because they are less expensive to their owners than prices charged for the underused capacity of the Project. Paradoxically, some Basin residents are bitterly resentful of both the District and the Bureau, claiming that water rights formerly their own have, by means of the Project, been stolen. That is, both the enemies and the proponents of the Project adhere to the Western orthodoxy that water i.s scarce and drought imminent.

The principal difficulty of this investigation lay in identifying the nature of the problem, for the situation seemed full of contradictions. Consequently, the primary contribution of the dissertation is an explanation of Basin circumstances that accounts for arresting observations without inconsistency or contradiction. The most important hypotheses are, therefore, empirical, or historical and institutional. Economics, according to Richard T. Elya and Frank H. Knight, is a set of principles concerning what ought to be, not empirical description of what ~· Consistent with that perspective, once the nature of the problem is clear, application of economic principles is a prescriptive judgment of how the problem may be resolved.

The most important empirical hypotheses are as follows: Water is not scarce in the Weber Basin; neither are storage and conveyance facilities. All are abundant, even redunda nt. Nevertheless, in combination with certain institutional arrangements and a sustained propaganda campaign, this very abundance contributes to persistence of the attitude that water is scarce. Redundant facilities the reby encourage even more unneeded development. What appears on first examination to be a case of misallocated water resources by discriminatory prices, turns out to be a problem of distributing the burden of paying for excessive, unwanted public works. Water itself is a free good in the Basin. Actual distribution of the repayment burden is partly ideological and partly pragmatic; partly a political choice and partly a bureaucratic decision; partly a manifestation of agrarian policy and partly what the traffic will bear.

If water is free, it is not an economic good, and not a subject for economic analysis . The Basin has an ample water supply, but water may nevertheless be locally and periodically scarce. The water problem is therefore one of conveyance and timing. Control of timing requires storage. Conveyance requires energy, as well as aqueducts. In the Weber Basin, conveyance energy may be either the controlled flow of falling (mountain) water, or electrically powered pumps tapping abundant groundwater reservoirs. The water development problem is, therefore, an issue of alternative capital facilities for the control and delivery of water (itself abundant). Efficient resource allocation in water development is consequently relevant at the !.!!vestment level; it is not a matter of pricing water. In this case, the major investment decisions have already been implemented, and the problem is one of evaluating distribution of the repayment burden.

The relevant economics literature is principles of equitable taxation, and of public utilities' pricing. Application to the Basin situation produces a conclusion that present arrangements are as equitable as could be devised. Further redundant investment (inefficient use of resources), however, could be avoided if the State Engineer's Office took a harder line on requests to drill new wells. The information provided in this work could be the basis for making such a program popularly acceptable.

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