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## Water, Water Everywhere and Plenty of it to Drink

According to various sources (and my own experience) the amount of water one needs for drinking and cooking each day is … 10 to 20 liters. This is about 2.5 to 5 gallons per day. For example, when backpacking and doing a hefty hike with full pack with daily climb near 5,000 feet and mileage of 15 or so miles, I consume about 5 liters of water – not even 1.5 gallons. I use another half liter to cook with.

Throw in showering and cleaning and the numbers jump considerably. My guess is that a fairly luxurious shower each day would use about 150 additional liters of water. So, for a family of 4 using water for personal uses fairly liberally, we’d use about 700 liters of water per day or something close to 180 gallons per day.

This is a remarkably small amount of water when compared with the major uses of water. Since my students have learned to google my site for answers to upcoming quiz questions I will not provide the relevant information here. But suffice it to say that use of fresh water for power plants, irrigation, industry, environmental uses and other uses far outstrips the use of water like this for personal “needs.” I’d argue that a typical family of 4 actually “needs” way less than the 180 gallons that I cite above, but let’s just stick with that for a moment.

According to the Monroe County Water Authority (I get most of my water via them from Lake Ontario and some from the nearby Finger Lake Hemlock), a typical residential charge for water is about 18 cents per day for access to the water authority (so \$5.40 per month to be connected to the water system) and about 0.26 cents per gallon. That’s right. We don’t pay a quarter per gallon, we pay about a quarter of a penny per gallon. Thus a typical family of 4 that makes very luxurious personal use of water would have a marginal (there’s that darn word again!) cost of water of about 46 cents per day. Over the course of a month that amounts to \$14. So the total water charge for “basic needs” for a family of 4 amounts to less than \$20 per month. That is pretty incredible for a substance that is truly vital for life.

Two simple points. For those folks who are gruesomely opposed to using the money price system to manage resources, particularly as we worry about drought conditions across the US (and as I watch my neighbors water their lawns and fill their pools day after day after day after day), invoking the “basic needs” of people as a reason not to apply pricing to water is nothing more than an appeal to a barbaric notion, a wrong notion, of people’s apprehension at what “greedy” pricing systems do. Even if water prices were to double, then a typical family, using an abundant amount of water for “basic needs” would be paying less than \$34 per month for water. Even within this amount I have left plenty of room for conservation. Remember how much water I use when backpacking under strenuous conditions. But the second point is that if people are so worried about having “basic needs met” by some amorphous conception of “society” that still is not reason to reject using prices to allocate water. Why? Water consumption for basic human needs is a very, very small proportion of the total amount of water used in other uses. It would be rather inexpensive to simply give away the 180 gallons or so per day that are needed for “basic needs” and then to implement a two- or three-tiered system of pricing for other uses. For example, once my family exceeds 180 gallons for the day, perhaps we start to pay not only a quarter penny per gallon but maybe 5 cents per gallon. Perhaps we implement (as we do minimally now) different fees to different types of users and do it in a similar way that ensures a basic amount for basic needs (such as drinking water for farm animals) and then incrementally price more when supply and demand conditions merit.

So while we see lots of hand wringing (and also lots of unsupportable claims that drought today in NYS is a result of global warming) about what to do when water availability is slightly threatened, we have of course a very easy solution. But the mindset in this country has been so turned away from respecting the forces of supply and demand that any and all arguments are used to dismiss having to rely on the most amazing allocation system that has ever emerged. Ever. In fact, the mindset is typically worse than this. No amount of evidence that residential use is small, that it can be provided for free and that increasing pricing for incremental leisure and other uses does work, is enough to persuade people. I cannot tell you how many times I’ve encountered the thinking that “specifics are irrelevant” and “evidence is irrelevant” when it comes to a wide variety of issues. Strangely I still think that teaching folks basic economics does some good, but that is a crackpot notion. My new baseline view is that people hold religious beliefs about how the world works, in particular about how supply and demand manifest themselves in our lives, and refuse to consider the complexity of our modern social order. More of course on that idea in future posts, for it is the reason I want to not only quit blogging but leave the economics profession for good.

By the way, readers should remember that we here in the water abundant Northeast typically pay … more… for water than in the desert areas of the American West. You heard that correctly.

### 3 Responses to “Water, Water Everywhere and Plenty of it to Drink”

1. Harry says:

Since I have spent over sixteen years in hotels, I cannot say smugly that I have never paid a water and sewer bill; I own my own well — bought a Jacuzzi submersible pump to replace the one hit by lightning. I do own water rights to my well that used to be drunk from by more than 100 cows daily.

Where I grew up, maybe 450 yards uphill, we had a shallow well that was always losing its prime after four showers, so my parents dug a new well to 300 feet, which solved the problem; it was a submersible pump, too, installed by the same guy. To find the correct place to drill, he used a dousing rod I was not there to see it.

I later learned that the dousing rod was part of Keynes’ General Theory, and was used to find the best place for the TVA dam.

2. Jacob says:

Did you mean to say Northeasterners pay more than people in Phoenix? Not sure what point you’re trying to make if the last sentence is written correctly (supply and demand already impact water “markets”?).

3. Wintercow20 says:

Oh yes… MORE and that is due to the massive subsidy for water in most of western US