The management of water resources is an essential problem for our life and social and economic activities. There has been a serious shortage of water in East Mikawa area of Japan. Many automobile firms are concentrated in this area and they need industrial water as an important intermediate input. This area has a plentiful agricultural base. The productivity of agricultural business also strongly depends on the water supply from Toyogawa River and waterways. In this paper, we try to analyze the relationship between the regional economy and water resources in East-Mikawa region. The targeted area is divided into four sub-regions, i.e. Toyohashi, Toyokawa, Tahara, and Shinshiro blocks. Some variables which related with water demand and supply are estimated by the econometric method. Comparing the estimated equations, we could get several findings. Firstly, the agricultural water supply depends on the regional economy because the agricultural sector is a major industry in this region. Secondly, the manufacturing sector will be also affected if the rate of water saving is very high. Thirdly, it is expected that the demand of tap water increases due to changes in the life style. In this region, a new dam is planned. Our result suggests that it is necessary to pay attention the relationship between regional economic structures and water resources in East-Mikawa region.

JEL classification : R11, R15