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AN APPLICATION OF INVESTMENT TIMING ANALYSIS: DUAL WATER SYSTEMS 1
Author(s) -
Leconte Robert,
Narayanan Rangesan,
Hughes Trevor C.
Publication year - 1988
Publication title -
jawra journal of the american water resources association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.957
H-Index - 105
eISSN - 1752-1688
pISSN - 1093-474X
DOI - 10.1111/j.1752-1688.1988.tb02980.x
Subject(s) - dual (grammatical number) , water supply , investment (military) , population , environmental science , environmental economics , water resource management , environmental engineering , operations research , computer science , economics , engineering , art , literature , demography , sociology , politics , political science , law
A general methodology to study the economics of dual water systems (defined here as a separate distribution system for untreated low quality local surface Water for outdoor municipal water supply) is summarized and the application of the method to a rapidly growing city is presented. In the first step, a cost‐benefit criterion for evaluating dual systems is developed. The criterion is then extended to a dynamic case where the population to be served increases with time and where the dual system is allowed to expand. The optimal investment time to introduce the dual water supply project is obtained by maximizing social welfare. The model is applied to the city of West Jordan, Utah, where a dual system is currently being proposed. Model results indicate that for the city as a whole dual supply is not economically feasible. However, when the model is applied to a part of the city, it is found feasible and the optimal time to initiate the project would be in the year 1989.