SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC. 
203 
and the amount of usable irrigation water are the same. That 
is one extreme. The other extreme occurs when the natural 
inflow happens to coincide with the period of irrigation de- 
mand; then the reservoir may do no good at all, the water 
would be available when needed even without it. In that 
case the yield is zero. Of course, zero-yield reservoirs are never 
built; they are simply a conceptual possibility. Many genuine 
cases lie between these two extremes, and there are patterns 
of inflow and demand in which the yield is greater than the 
capacity. All this is complicated enough, but the case here 
described — of an isolated reservoir operated for irrigation 
supply only — is excessively simple. These considerations 
make it clear that the relationship between height of dam (which 
costs resources) and usable output is by no means an easv 
one to ascertain. 
Current practice avoids determining this functional relation- 
ship. Instead it determines one or two points on it by postul- 
ating a specific height for the dam and then estimating the 
usable yield provided by that height by means of quite elaborate 
calculations. 
The instance of the dam height-usable output relation- 
ship is cited to illustrate the complexities hidden in every one 
of the performance functions required for the analysis of an 
investment project. There seem to be two ways to proceed and 
it appears that in practical analysis both should be followed. 
One is to impose drastically simplified functional relation- 
ships. For example, the relationship between dam height and 
average reservoir content might be approximated by a qua- 
dratic function, and the other relationships would similarly be 
held to the simplest expressions that state the problem in a 
meaningful way. This procedure would both facilitate empirical 
estimation of the parameters required and would simplify the 
formal problem of finding the optimal values of the design 
specifications. It would also, of course, be extremely un 
reliable. 
Dorfman - pag. 17