Tuesday, August 05, 2008

How to sell water.

People don't like paying for water. Water is necessary for life, they argue, and it comes freely out of the sky. Why should we pay for it? There is some truth to that, but absent a market price, water is consumed freely and wastefully, which doesn't really matter in the wetter parts of the country, but in the southwest, and last year, in the South, it does matter.

Rationing is not an effective solution, because rationing encourages waste. Cutting consumption by a flat percentage is also not effective, because it forces those who have already cut consumption to cut more, while allowing the profligate to simply reduce their surplus.

The ideal solution, it seems to me, is to fix a non-zero point above which water costs and below which water is subsidized. The average individual urban consumption is 31ish gallons a day. Fix the limit at, for example, 25 gallons a day. If you use less than 25 gallons, the people using more subsidize your water use. The more you use, the more you pay and the greater your rate. The less you use, the less you pay, until you start earning credit for reduced consumption.

This would discourage waste all around, and encourage even the most frugal to reduce their consumption.

3 Comments:

Blogger Noumenon said...

This isn't exactly related, but I love the water fountain at work soo much and yet I've been wondering whether I would have subscribed to it if it was for pay. Some things it's good to have free, if just because having to get out your wallet makes you recoil a little. Water is pretty easy to meter without a lot of little transactions, though.

9:17 AM  
Blogger Octavo Dia said...

Some things it's good to have free, if just because having to get out your wallet makes you recoil a little.

We essentially have a pay water fountain at work, in that we get in bottled water for the water cooler, and you have to be a member of the water club to use that water. I have my own water glass and get my water from the sink in the break room. Pricing of water caused me to use an alternate source (and one that is more environmentally friendly, I might add).

6:39 PM  
Blogger Noumenon said...

How much does the water club cost? Do you get a button? I bet people drink way more water just because they shelled out for water club than they would if it were free to all.

I have my own water glass and get my water from the sink in the break room.

Start an underground club! Sink Club!

9:06 AM  

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