Impact of Changes in Economic Components of Final Demand on Water Use in Agriculture: Input-Output Analysis in Khorasan Razavi Province

This study investigates impact of changes in final demand components on water use in various economic sectors in general and Agriculture in particular as well as their relationship. For this purpose, the input-output analysis table for different sectors of the economy in the Khorasan Razavi province is used, and the table is updated in RAS methodology. The study results show that any increase in the components of final demand would cause the increase in water consumption in different sectors, among which the share of agricultural sector would be considerable; in addition, any increase in exports and private consumptions of water would increase its consumption, so that a twenty percent increase in the exports and the same in the private consumption of water would increase its consumption by 860,342 and 712,746 thousand cubic meters, respectively; however, the same amount of increase in government water consumption and investment would increase its consumption by less than thirty thousand cubic meters. In this regard, the share of agriculture in water consumption per increase in private demand and the same in exports is high in the total consumption (95.74 and 98.05 percent, respectively), while its shares in increasing the water consumption per the increase in government demand and investment are 69.34 and 83.41 percent, respectively. The results of water demand elasticity with respect to changes in final demand components indicate a low elasticity (less than one) in all of the components.
JEL Classification: Q25, C67, E2, Q1
Keywords:
Water, Input-Output Table, Final Demand, Agriculture, Khorasan Razavi