Calculating Economic Benefits

The OFM Input/Output Model

Unless otherwise noted, all economic benefit estimates cited by OCR were calculated using the Washington State Office of Financial Management (OFM) 2002 Input/Output model. The model was created in 2006 by experts from seven state agencies and  legislative staff under the direction of Dr. William Beyers (University of Washington) and Dr. Irv Lefberg (OFM). Dr. Ta-Win Lin from OFM managed the project.

OFM describes the model as a:

50-sector model of the state economy using the North American Industrial Classification System (NAICS) definition of industries. In addition to the industrial sectors, the model also contains six final demand categories (Washington personal consumption expenditures, Washington private investment outlays, Washington state and local government expenditures, sales by Washington sectors to the federal government, and sales by Washington sectors to elsewhere in the United States and to foreign customers).

Ecology economist Kasia Patora explains how she used the model to estimate the economic benefit derived from issuing municipal/industrial water rights:

[The numbers] represent the long-run impacts in the economy as (in this case) development à property and exchange values à spending on construction and real estate goods and services à wages and profits à further cycles of spending and earnings in the economy as that money continues to move.

Additionally, the economic benefits generated by municipal water rights were calculated assuming full use of the water. The benefit will not be immediate, but will occur over a number of years as houses and businesses are built and, then, provided with water from the city's water right.

The economic benefits derived from making more irrigation water available were calculated using agriculture sector inputs.

Potential economic benefits derived from increasing stream flows were not calculated, because the model does not include an environmental input.

More about the 2002 Input/Output Model.

Reclamation Projects

Most of the economic benefit estimates for projects in which the US Bureau of Reclamation (Reclamation) serves as the lead agency were calculated by Reclamation. The Weber Siphon numbers come from the Federal Government's Recovery.Gov web-based database. The database is updated quarterly with real time numbers. It does not include projections or use economic multipliers.