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Abstract

As metropolitan areas require additional water supplies to meet the needs of growing populations, many are looking to outlying rural areas to provide water. This study examines potential economic impacts from water sales in Burleson and Hale Counties in Texas, focusing on agricultural output, household spending, and trade flows with nearby trade centers. While a net economic gain is estimated for Burleson County when accounting for water leases and agricultural production, Hale County suffers significant losses that extend to the Lubbock County trade center. These results suggest more arid regions are likely to experience greater agriculture losses which may result in overall regional economic decline even though individ-ual landowners benefit. Incorporating trade flows into the regional economic model provides additional information about effects on the broader regional economy, including regional trade centers that serve rural communities.

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