Economic Analysis of Social Issues 1st Edition by Alan Grant

Exercise 31

[Related to Application 2.1 on page. 39] Suppose that the government of Nebraska is considering siphoning off as much water as it can from the Republican River before it flows into Kansas. Siphoning off water is expensive but provides great benefits when the water is used to irrigate crops. Who are the relevant stakeholders Nebraska should consider in its own cost-benefit analysis? If the decision were up to the federal government, and not the Nebraska government, would the answer change?