Water Resources Research Act Program

Details for Project ID 2012CO263B

The Short and Long-Term Impacts of Drought on the Structure of Regional Economics: Investigating the Farm Supply Chain

Institute: Colorado
Year Established: 2012 Start Date: 2012-03-01 End Date: 2013-02-28
Total Federal Funds: $5,000 Total Non-Federal Funds: $2,400

Principal Investigators: Christopher Goemans

Abstract: Agricultural producers throughout southern Colorado are currently suffering through drought conditions comparable to 2002. Water shortages have lead to reductions in output and lost revenues for the agricultural sector. Initial revenue losses associated with lost production represent only a portion of the full economic impact to these regions. Through linkages with other producers in the region, reductions in economic activity can be twice the direct impacts and therefore accurate estimates of their magnitude are critical to policy makers. Current approaches to estimating these impacts (e.g., Implan) assume that the relationships between industries remain constant through drought and non-drought periods. The objective of this study is to develop a better understanding of how the linkages within local economies evolve in response to prolonged drought. The proposed project is critical for developing an accurate and complete picture of the immediate and long-term economic impacts associated with drought.