Browsing Hydrology & Water Resources Technical Reports by Subjects
Now showing items 1-1 of 1
COLLECTIVE UTILITY IN THE MANAGEMENT OF NATURAL RESOURCES: A SYSTEMS APPROACHThe main purpose of this report is to develop an economic theory, along the lines of the Bergson- Samuelson social welfare theory, to regulate the utilization of natural resources in the long -term interest of a political- economic group of individuals and firms. The theory, called Collective Utility, qualifies as a "systems approach" because of its inherent flexibility, generality, and comprehensiveness. Collective Utility is a function of individual satisfactions and firm revenues, which are, in general, contingent upon the actions of other individuals and /or firms. Such interactions are called externalities. It is the contention of this report that efficient management of natural resources will follow from efficient control of externalities. A taxation - subsidy structure is suggested as an efficient control and the complete mathematics of determining and implementing such a structure are provided. Finally, the idea of externalities is integrated within the framework of Collective Utility to form an optimal policy for the utilization of natural resources using the techniques of calculus of variations.