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Paradox of value: What value do you place on the reliable delivery of clean and safe drinking water?

Posted on by Mike

There is no denying that water is a life sustaining commodity—it is the foundation of life and a basic need.  Water is needed in every aspect of daily life, from drinking to cooking, and directly affects every aspect of the production of goods and services from food to the generation of all forms of electricity.  In turn, ever increasing amounts of energy are needed to pump water from deeper groundwater sources, as freshwater sources are becoming more limited due to sustained droughts and consumption.  This is true even in the United States.  In fact, sources of water are so limited in parts of the world today that millions of people spend their entire day searching for it.  Yet, water’s utility is not reflected in rates charged to the American public for its use.  

Rates for water services are much lower than for any other service provided to the public, from phone to electricity and even cable TV.    Cities across America range in median rates for water services, though a typical family water bill ranges from $15 to $30 for 7500 gallons/month, and in some cases, can be as high as $57.  The latter number may seem high in comparison to the first number–and depends on cities’ own tiered pricing systems, as many cities levy higher charges for increased usage–but, if compared to the average cable TV, phone or electricity bill, water rates are still the best value in town.  

Adam Smith, father of modern economics, conceived the basic rule used to determine the relative value of goods.  “The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.”  Given its intrinsic value to a vital economy, its relative scarcity and challenge of acquiring and delivering water, one must ask, is the current price of water really objective and fair?  Water, by its very nature, would seem to be a priceless commodity given its value to life itself.  So, why are we less willing to pay more for the reliable delivery of clean and safe drinking water than for wireless phone service or cable TV?

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2 Responses to Paradox of value: What value do you place on the reliable delivery of clean and safe drinking water?

  1. Joel Saltzman says:

    All good points. But, at least in the in the Eastern half of the country, flowing and accessible underground water sources are readily available. Will the state or federal governments be able or willing to take, by eminent domain or other procedures, water property rights and allocation authority for sourcing aquifers, lakes, and rivers and streams, and then auction the fresh water to attempt to capture its value and conserve a precious resource? That sounds to me like a form of tax increase that the voting public would not tolerate. Quite a paradox!

  2. Karla Teasley says:

    This is a very relevant and important topic. The more we value our water service, the more we protect it and conserve, ensuring this precious resource for future generations.

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