Economic Modeling and Analysis Tools

We provide technical assistance and policy guidance for economic and demographic analyses to sustainably manage California’s water resources. In addition to developing economic and demographic models and tools our work includes:

• Analyzing local, regional, and statewide economic costs and benefits of proposed water management programs and projects and determining socioeconomic impacts
• Determining the economic values of ecosystem services
• Using GIS and other methods to allocate current and forecasted demographic data, including population, housing, and personal income to geographic areas
• Forecasting economically based urban and agricultural water demands
• Evaluating regional and statewide direct and indirect economic impacts of water shortages
• Estimating the value of changes to urban and agricultural water supply reliability
• Providing technical assistance to state, federal, and local agencies

Demographic Data & Information

Demographic data calculations are mainly based on U.S. Census, American Community Survey (ACS)and California Department of Finance (DOF)data. Department of Water Resources (DWR) uses these data for California Water Plan Updates and for other projects. DWR subdivides California into study areas for planning purposes. The study areas are:

• Hydrologic Regions (HR) A Hydrologic Region is the largest study area. There are 10 HRs which correspond to the state’s major drainage basins
• Planning Areas (PA)– Each HR consists of multiple Planning Areas

   

• Detailed Analysis Units (DAU) – A DAU is the smallest study area. Each countyconsists of multiple DAUs. The DAUs are often split by two or more counties

DWR has 4 regions , each region consists of a list of counties. EAS demography staff updates every year regional population data. Demography staff uses Geographic Information System (GIS) to allocate census year block level population into DAU population estimates for each of the California 58 counties. For the between census year DAU population estimation, demography staff uses DOF's county and city total numbers. You can download the regional DAU population numbers below:

• Northern RegionButte_Yolo (xlsx)

• North Central Region Alameda_Yuba (xlsx)

• South Central Region Alameda_Tuolumne (xlsx)

• Southern Region Imperial_Ventura (xlsx)

  Economic Analysis Models & Tools

• DWR Weather Normalization Modeling Tool: The DWR Weather Normalization Modeling Tool is a regression modeling framework developed in EXCEL© that uses trend, population, seasonality, and weather data linked to individual urban water agencies as explanatory variables. The tool also can use EDD unemployment rate data as an economic variable to adjust water use based on increased economic activity. This tool was developed by DWR staff for use by urban water agency managers as an optional method for assessing their compliance with SB7x-7 water use criteria. To facilitate exploratory modeling work, the tool also allows the creation and use of pre-specified regression models.

   

• Flood Rapid Appraisal (F-RAM) Model: The F-RAM model is a method for the rapid and consistent evaluation of floodplain management measures in a benefit-cost analysis framework. It was developed by URS Corporation to assess the benefits (reduction in flood damages) of DWR’s levee repair program and prioritize its future repair program.

   

• GDR-NETFLOW Model: The NETFLOW is a network flow model developed using a linear programming framework. It was designed to evaluate the relative economic value of alternative drainage management options to identify the most economically efficient combination of options and facilitate “what if” analyses. It was developed to evaluate drainage management options for the Grasslands Drainage Reuse Project. The options evaluated included drainage water reuse, sequential application to salt-tolerant crops and halophytes, drainage water treatment facilities, salt disposal, and land retirement.

   

• Least Cost Planning Simulation (LCPSIM) Model: LCPSIMi s a yearly time-step simulation/optimization model developed to assess the economic benefits and costs of enhancing urban water service reliability at the regional level. In LCPSIM, regional water management operations are simulated on a yearly time-step, including the operation of surface and groundwater carryover storage capacity assumed to be available to the region. The model accounts for the ability of shortage management (contingency) measures, including water transfers, to reduce regional costs and losses associated with shortage events, and for the ability of long-term demand reduction and supply augmentation measures to reduce the frequency, magnitude, and duration of those shortage events. The LCPSIM output is the economically efficient level of adoption of reliability enhancement measures by type, level of implementation, and cost of those measures.

   

• Lifecycle Benefit-Cost Analysis Tool: This is a Microsoft Excel based benefit cost analysis tool designed to be used in real applications of Benefit Cost Analysis (BCA). Users can construct a BCA by entering a series of benefits and costs into a Microsoft Excel spreadsheet template. Users can enter one-off benefits and costs, as well as benefits and costs occurring over multiple years. Users can also calculate a horizon value for their BCA. In addition, users can also calculate net benefits from time-savings, determine valuations for the environment, and calculate values for the net benefits associated with life savings and accident reduction. The tool produces results automatically.

   

• Net Crop Revenue Model (NCRM): The NCRMare spreadsheet programs which estimate net crop revenues for important crops for recent years in 27 California counties and regions. The goal of the NCRM program is to develop and maintain up-to-date data covering all agricultural areas in the State.

   

• Statewide Agricultural Production (SWAP) Model: The SWAP model is a positive mathematical programming method for modeling agricultural production and water use. In California SWAP represents the most comprehensive agricultural economic modeling framework available and embodies over a decade of research, development, and applications in California. It was developed by researchers at the University of California, Davis under Professor Richard Howitt in collaboration with DWR with supplemental funding provided by the U.S. Dept. of Interior and Bureau of Reclamation. 

Data

• USDA Economic Research Service: The United States Department of Agriculture (USDA) Economic Research Service provides a wide range of economic data on agriculture in the United States, by State and/or commodity.

• UC Davis Cost and Return Studies: the Cost and Return Studies on a broad range of commodities produced in California, conducted by the UC Davis Agricultural Extension Center.

   

• Water Resources Collections and Archives: The Water Resources Collections & Archives (WRCA) acquires, preserves, and provides access to materials that document water-related issues throughout the United States and beyond, with a particular emphasis on issues affecting the state of California.

   

• Bureau of Economic Analysis: The Bureau of Economic Analysis’ (BEA) national economic statistics provide a comprehensive view of U.S. production, consumption, investment, exports and imports, and income and saving. These statistics are best known by summary measures such as gross domestic product (GDP), corporate profits, personal income and spending, and personal saving.

   

• Federal Reserve Bank of St. Louis Economic Research: The Research Division of the Federal Reserve Bank of St. Louis is responsible for advising the Bank president on matters of economic policy. The Division monitors the economic and financial literature and produces research in the areas of money and banking, macroeconomics, and international and regional economics.