Chapter 11 Economics of water resources: a survey This chapter reviews the application of economic concepts to study the consumption supply and allocation of water resources. Water management poses a wide array of issues for economists because few commodities are so pervasively involved in human economic activities. To an important degree the location and intensity of economic activities depend on the availability of water for drinking for agricultural and industrial production for sanitation and waste assimilation for transportation and for aesthetic and recreational benefits. Water is said to be the only substance that exists in all three physical statessolid liquid and gaswithin the normal temperature range found on the earths surface. Through the process known as the hydrologic cycle the earths water inventory is continually being transformed among the three states. No form of life on the earth can exist without water. Water is a universal solvent. The chapter reviews those characteristics of water resource systems that serve to set them apart from other resources with particular reference to the attributes that serve as the basis for public intervention. It also describes the nature of interventions that have been made and emphasizes the need for evaluating them in terms of their objectives.