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Partial elasticities of substitution among capital, labor, and water provide empirical evidence concerning the possibilities of adjusting the techniques of manufacturing to accommodate changing scarcities of water. Empirical estimates of elasticities for the United States are obtained by using a trans-log cost function with SIC two-digit manufacturing data for 1973. Results show that water and labor inputs are good substitutes but that water and capital are complements. Economic implications of this finding are discussed. INTRODUCTION SUBSTITUTING FOR WATER IN PRODUCTIONThe economics of water demand in different sectors of the U.S. economy is a matter of continuing interest for water resources planners and policy makers. Indicative of this is the fact that the National Water Commission [1973] devoted a large portion of its energies to the manifold questions surrounding the demand for water. Empirical studies on the demand for water, however, are substantially less abundant than is justified by the importance of the topic. Because of this it has been common for some time to resort to the assumption of fixed water use coefficients when projecting future demands for water. This is so despite the fact that virtually everyone agrees that projection of future industrial requirements entails such analyses as '(1) an industry-by-industry assessment of available, emerging and potential water use technologies; and (2) an associated appraisal of the potentials for substituting other factor inputs for water in the production process' [Water Resources Council, 1972, p. 8]. This quotation, while stressing the importance of examining water substitution in production relationships, points to engineering-economic types of studies as the appropriate way to proceed. There is another way to study the substitution phenomenon, however: through econometric analysis of aggregate industry data. In this paper we report the results of the first attempt at this kind of approach, in which we estimate the elasticities o• substitution between water anti other productive inputs for the aggregate U.S. manufacturing sector. As such, the study represents another step in analytical thrust that has gained some popularity in recent years: the econometric investigation of aggregate production functions containing natural resources [Berndt and Wood, 1975;Berndt and Jorgenson, 1973;Griffin and Gregory, 1976;Humphrey and Moroney, 1975;Moroney and Toevs, 1977]. While our work must be considered to be preliminary owing to the roughness of the data, certain clear conclusions do stand out. The most surprising conclusion, perhaps, is that water and capital inputs appear to be complements, not substitutes, in the U.S. manufacturing economy.