variable cost was 12 cents per pound of BOD for median river-flow level of B 

 class, with current economic activity. This cost increased to 14.6 cents when 

 population was projected to 1980 and to $4.15 under the assumption of eco- 

 nomic expansion (maximizing net benefits) and with projected 1980 population. 

 All sectors included in the analysis were affected in the incidence of costs. 



Sensitivity analysis indicated that the optimal level of resource allocation was 

 quite stable at each flow level. The resource allocation, water-treatment plants, 

 farms, and industry changed considerably with flow level. This fact indicates 

 that in planning waste-water treatment facilities, the river-flow level must be 

 specified. Also, if water-quality standards are to be enforceable, some level of 

 flow must be specified. This feature is particularly important for the months of 

 July, August, September, and October. 



For each of the three industries analyzed separately (paper, wool, and tanning) 

 public treatment of industrial waste water was the optimal treatment process in 

 one or more of the analytical solutions, and usually occurred at the median-flow 

 level. This indicates that some combination of public and private treatment of 

 waste water would result in the lowest cost. Although economies of size were 

 included in the analysis, further economies could be achieved through coordinated 

 effort in waste-water treatment. Coordinated activity in river-water management 

 has economic foundation and may be necessary if a quality of B-class waters is to 

 be attained. 



Lake Resources 



Most lakes in the Ashuelot Basin, as well as those in all of southern New 

 Hampshire, are hydrologically separated from rivers by dams, which are used 

 primarily for regulating the height of the lake. The main exceptions are reservoirs 

 used for water supply, and flood-control structures. Most lakes are used and 

 managed for recreation purposes. Shoreline was the dominant feature determining 

 lake resource valuation. Implied capital value varied from $126 per foot to more 

 than $250, depending on the discount rate. Recreation land, including shoreline, 

 was imputed at a price of more than $15,000 an acre at the high end of the scale. 

 Lake-surface valuation was determined by boating and swimming activities. 

 Imputed prices on lake surface ranged from $42 to $147 an acre, depending on 

 location and discount rate. 



Beach activity was the strongest competitor for recreation resource use. 

 Strong economic forces encouraged small lot sizes for vacation cottages with 

 shoreline. Sizeable increases in the prices of shore lots over those of 1967-68 

 were indicated, and are in fact being observed now. 



Vacation cottages without shoreline were strong competition for the remaining 

 recreation land. The analyses suggest that with the current institutional arrange- 

 ment lakes will resemble a picture framed by a city block as recreation land is 

 fully developed. Observation of numerous lakes in southern New Hampshire 

 supports this kind of conclusion. The analyses also indicate that, once a lake has 

 been developed for recreational purposes, reversing its use for flow regulation or 

 water-supply source would be very expensive and probably politically prohibi- 

 tive. Because of the physical nature of any lake, shift in use would mean 

 variations in lake-water level. 



Lamprey River Basin 



To obtain supporting information and to achieve more generality of appli- 

 cation, a limited analysis was made for the Lamprey River basin, which is located 



IV 



