Sabado, Abril 16, 2011

Freakonomics » The Strange Economics of Water, and Why It Shouldn’t Be Free

Three things are clear.

First, when we buy bottled water, we’re not buying the water itself — we’re buying convenience, we’re buying coldness, and we’re buying branding (and some false measure of reassurance about safety). It’s easier to grab a bottle of water from our own fridge than to have a clean reuseable bottle, keep track of that elusive top, fill it, and keep it in the fridge. Bottled water in the cold case is often a good choice — compared to soda — when you just want something to drink. And although all water is essentially the same — a quarter of bottled water (Nestle Pure Life, Aquafina and Dasani) is re-filtered city tap water — we like the statement of carrying a bottle of Evian or SmartWater.

Second, we are not willing to pay much for water at home. Any time a water utility moves to raise water rates, the outcry is stupendous. Residents act as if increasing the water bill from $23 a month to $30 a month will force them to choose between their heart medicine and their water. In fact, the average household water bill in the U.S. is $34 a month, $1 a day. That’s less than half the cable TV or cell phone bill. Water at home is perhaps the best deal any of us get (now that The New York Times is no longer free online) — and a symbol of the very human instinct that basic water service should be cheap. But since a single half-liter of bottled water costs as much as a day’s worth of cooking, washing, showering, and toilet-flushing for a whole family, it’s clear we can learn both to appreciate water, and to pay for it.

Which leads to the final point about water economics. “Free” is the wrong price for water. In fact, the lack of a price for routine water service is the most important thing that’s wrong with water — resources that are free are wasted; there’s no incentive to learn to use them smartly; there’s no money to maintain and modernize the existing water system; there’s no incentive to reach back and protect the source of something that’s free.

If it’s free, the message is that it’s unlimited.

In the U.S., we spend $21 billion a year on bottled water. We spend $29 billion maintaining our entire water system: the pipes, treatment plants, and pumps. We spend almost as much on crushable plastic bottles as we do on our most fundamental infrastructure system.

I think this is a post full of insight that you should read it. Full story at Freakonomics.

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