Role of Water Utility in the Korean National Economy

Abstract

The 'twin water crises' in terms of both quantity and quality clearly demand that researchers provide policy makers with available and responsible information regarding the role of water utility. This paper employs input-output (I-O) analysis to examine the role of water utility in the national economy, using a specific application to Korea. A static I-O framework is employed, focusing on three topics in its application: the impacts of water supply investments and the inter-industry linkage effect, the water supply shortage costs, and the impacts of the rise in water rates. In addition, potential uses of the results are illustrated from the perspective of policy instruments. The overall results indicate that water supply investment and water shortage have a big influence on the standard of living and industrial production, but raising water rates in order to encourage conservation or to create investment funds has a minor effect on general price levels.