Virtual Water in an Input-Output Framework for the Valley of Mexico Basin

The Valley of Mexico basin (VMB) is located in central Mexico and produces one-fourth of the total national production. The overexploitation of its aquifers has been registered as the highest nationwide. This article introduces a methodology to estimate virtual water multipliers (VWM) for the economic activity in the basin based on an input-output matrix for the VMB for 2008. The VWM takes into account the virtual water related to the economic activities of a region, with the rest of the economy of Mexico and the world. The results identified the economic activities with low- and high-intensity water usage that are prevalent in the basin. In addition, based on the balance between virtual water imports and exports in the basin, it is concluded that goods with high water contents are imported and goods with low water contents are exported. This behavior describes the basin as a net importer of virtual water, which is a positive characteristic that helps to compensate for the water stress in the basin. This finding appears to confirm the Heckscher-Ohlin theorem of international trade, suggesting the economic rational of a region which is experiencing the highest water stress nationwide.