The Case for Reforming the Price of Water

2019-03-27T10:57:12-04:00March 22, 2016|

David Lipton2012By David Lipton

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One of the first things most students of economics learn is the diamond and water paradox. How can it be that water is free even though life cannot exist without it, while diamonds are expensive although no one dies for lack of diamonds?

The answer is that water can be free if its supply is abundant relative to demand. Nevertheless, it is abundantly clear that worldwide, the demand for water outpaces supply. […]