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Methods for apportioning the cost of a water resource project
Author(s) -
Heaney James P.,
Dickinson Robert E.
Publication year - 1982
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/wr018i003p00476
Subject(s) - axiom , generalization , resource (disambiguation) , computer science , axiomatic system , operations research , game theory , work (physics) , environmental economics , risk analysis (engineering) , business , economics , microeconomics , mathematics , engineering , mechanical engineering , mathematical analysis , computer network , geometry
Numerous ad hoc methods are used to apportion the costs of a water resource project among participants and/or purposes. Unfortunately these procedures do not always work, i.e., they lead to unfair assignment of costs. Accepted criteria for efficiency/financial analysis used in the water resources field are expressed in axiomatic form. These criteria are compared to accepted axioms of fairness from cooperative n ‐person game theory. Similarities between the two approaches are identified. The minimum costs, remaining savings (MCRS) method is proposed as an improved method of financial analysis. The MCRS method can be viewed as a generalization of the presently used separable costs, remaining benefits method.