Macroeconomic Accounting of Water Resources: An Input-Output Approach to Linkage Analysis and Impact Indicators Applied to the State of Ceará, Brazil

Abstract

This work aims to identify the key sectors of the economic structure, considering their water flows, and estimate each sector’s impact. The goal is to highlight systemic characteristics in the regional economy, establish water use priorities, and assess water security. Based on a regional input-output matrix, we use the following methodologies: the Rasmussen and Hirschman indices for the ‘forward and backward linkages’; simple multipliers of production, job, and income; and the elasticity of water consumption to final water demand. Thirty-two economic sectors and household consumption are analysed. From the elasticity of final water demand, we find that both trade and household consumption put more pressure on water consumption. Furthermore, a joint analysis of the applied methodologies shows that: (a) the trade sector is more relevant for the linkage of water flows, (b) the agriculture sector has the highest direct water consumption, and (c) the public administration sector has the highest intermediate water consumption.