The Consumer Surplus and Economic Value of Industrial Water in Korea

Euh Seung Seob; Yoo, Seung-Hoon

doi:10.15793/kspr.2010.65..009

Industrial water used in the production process as a productive factor raises the economic value. That is, Industrial water is essential element. Therefore, in order to smooth industrial activity investment for water supply must be proceeded effectively. In terms of decision-making related to this, the economic value of the industrial water is used essentially. This study attempts to estimate the consumer surplus and economic value of industrial water for eleven sectors. In this process, information for the price elasticity of demand is based on industry survey data and demand function approach. As a result, the price elasticity of industrial water are all significant at 1% level or 5% level and the price elasticity of industrial water were all negative. Using this result, the consumer surplus in 2009 is estimated as 262 to 385 won per ㎥. Meanwhile, the economic value in 2009 is computed as 985 to 1,241 won per ㎥. The result of this study is containing more reasonable results than the other cases. Also, the economic value of industrial water that is still lacked in the case of the domestic study is identified specifically. That is, through this study, the fact that industrial water supply provide consumer with the considerable economic value and the consumer surplus is confirmed.

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