Quantifying Socioeconomic Potential Losses Under Water Scarcity Using the WIOLP Model

The increasing frequency and severity of extreme droughts caused by climate change has emerged as a key risk factor exerting complex effects on the overall national economy through a structure of interconnected industries. The Water Input–Output Linear Programming (WIOLP) model was applied to data from 2015 to 2018 to quantitatively assess the effects of drought-induced water use constraints on production and socioeconomic potential losses. By modeling scenarios in which water use decreased by 10% from 100%, changes in the gross output, the value added, the socioeconomic potential loss, and the shadow price by industry were evaluated. Results showed that socioeconomic potential losses increased nonlinearly, with maximum potential losses of 311,118 billion Korean Won (KRW) in 2015 and 355,260 billion KRW in 2018. The shadow price rose from 7311 to 73,186 KRW/m³ in 2015 and from 3291 to 89,586 KRW/m³ in 2018, confirming that the marginal productivity of water increased exponentially under stricter constraints. Industry-level analysis revealed the largest losses in high water use industries (e.g., agriculture, forestry, fisheries, chemicals, and non-metals), whereas electricity, electronics, and machinery sectors maintained relatively stable production. This study demonstrates that the WIOLP model can empirically analyze nonlinear economic ripple effects under resource constraints, overcoming limitations of conventional input–output and computable general equilibrium models.