WATER FINANCING: AN ECONOMIC MODEL OF BOND QUALITY AND INTEREST COST

THE PROPOSED RESEARCH WILL DEVELOP STATISTICAL MODELS OF BOND-PRICING OF WATER INVESTMENT TO TEST THE EMPIRICAL IMPLICATIONS OF THE ECONOMIC ANALYSIS OF WATER PRICING, WATER LAW, AND SELECTED ASPECTS OF STATE REGULATION OF SECURITIES AND BANKING. THIS EFFORT WILL EXTEND EXISTING FINANCIAL MODELING TECHNIQUES BY INTEGRATING ECONOMIC, LEGAL, AND POLICY CONSIDERATIONS. THREE MAJOR OUTCOMES ARE ANTICIPATED. FIRST, A CENTRALIZED DATA BASE WILL BE DEVELOPED LINKING FINANCIAL INFORMATION ON BOND YIELDS TO OPERATING, LEGAL, AND REGULATORY INFORMATION ON WATER ORGANIZATIONS. SECOND, THE EMPIRICAL WORK WILL TEST PREVALENT THEORIES OF THE ECONOMIC CONSEQUENCES OF ALTERNATIVE WATER POLICIES. THIRD, PUBLIC DECISION MAKERS CAN USE THE FINDINGS TO DESIGN REFORMS THAT RESULT IN LOWER-COST FINANCING OF WATER INVESTMENT.