Economic analyses in watershed management planning: Methods, applications and education

J. E. De Steiguer, Theresa Mau-Crimmins

Research output: Contribution to journalReview articlepeer-review

1 Scopus citations


The management of watersheds is most commonly thought to involve the hydrological, physical, biological and engineering sciences. However, economics also has a role in watershed management planning. Cost-benefit analysis (CBA) is the most common type of economic analysis used for watershed planning. CBA measures, in monetary terms, a project's inputs and outputs over the service life of the project. Under CBA, a project that yields discounted net benefits which exceed costs, is said to be "economically efficient." Economically efficient projects are desirable because they represent a potential Pareto improvement, which is to say that society can gain an economic surplus, hence a net improvement, from the activity. CBA is a useful decision method when the watershed manager must make a decision based solely upon economic efficiency. However, watershed managers frequently must deal with multiple decision criteria. Multi-Criteria Decision Models (MCDMs) have been developed for such situations. "Economics" can enter into MCDMs as one of the decision criteria. Examples of MCDMs include linear and goal programming, Multi-Attribute Utility Theory and the Analytic Hierarchy Process. With regard to the study of economics in watershed management curricula in American universities, economics and the management sciences play a small but important role in watershed education. However, with the trend toward greater stakeholder participation in watershed decisions, future curricula could see a greater demand for more social and management science courses.

Original languageEnglish (US)
Pages (from-to)343-357
Number of pages15
JournalAnnals of Arid Zone
Issue number3-4
StatePublished - Sep 2002


  • Cost-benefit analysis
  • Economics
  • Multi-criteria decision methods
  • Watershed management

ASJC Scopus subject areas

  • Ecology, Evolution, Behavior and Systematics
  • Animal Science and Zoology
  • Agronomy and Crop Science


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