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Are you arguing that the water infrastructure should be privately owned? It's both a natural monopoly and one of the most necessary things for life, and is rela

by ericd 7y ago

Are you arguing that the water infrastructure should be privately owned? It's both a natural monopoly and one of the most necessary things for life, and is relatively price inelastic (up to the point of bottled water becoming cheaper), which means gouging when someone profit-motivated gets at the helm.

JohnFen 7y ago
When I look at what's happened with other water systems that have been privatized, it makes me deeply fear privatization of water.
- rayiner 7y ago
  Like France: https://en.wikipedia.org/wiki/Water_privatization_in_France https://en.wikipedia.org/wiki/Water_privatization_in_France. (Someone in a sibling comment just mentioned how great France's water system is.)
rayiner 7y ago
That is a poor justification against proper water pricing. Very few people are in a situation where higher water/sewer rates would impact their survival. On the other hand, if you set water/sewer rates very low for the sake of that small minority, everyone else gets a huge windfall, paying much less for elective water use than they should. Estimates of long-run demand elasticity are over 0.5: http://www.allianceforwaterefficiency.org/uploadedFiles/Resource_Center/Library/rates/White-Paper-Rate-Structures-and-Conservation-March-13-2009.pdf http://www.allianceforwaterefficiency.org/uploadedFiles/Reso... (p. 3). That means say doubling water/sewer rates could reduce demand significantly, while raising revenue to address maintenance back logs. The effect on the poor can be mitigated by, e.g. regulated pricing for the first X gallons per month.
- ericd 7y ago
  I'm absolutely not arguing against proper water pricing, I agree that the price should be increased to try to decrease waste. I'm arguing against privatization. Good point about the elasticity, I should have said it's very inelastic up to the point where the necessity is met, and then it becomes much more elastic.
  - rayiner 7y ago
    Privitization is in theory an orthogonal issue. In practice, public water entities can't be trusted to price water appropriately because they're too heavily influenced by short-term political demands.

by ericd 7y ago

JohnFen 7y ago

When I look at what's happened with other water systems that have been privatized, it makes me deeply fear privatization of water.

rayiner 7y ago
Like France: https://en.wikipedia.org/wiki/Water_privatization_in_France https://en.wikipedia.org/wiki/Water_privatization_in_France. (Someone in a sibling comment just mentioned how great France's water system is.)

rayiner 7y ago

That is a poor justification against proper water pricing. Very few people are in a situation where higher water/sewer rates would impact their survival. On the other hand, if you set water/sewer rates very low for the sake of that small minority, everyone else gets a huge windfall, paying much less for elective water use than they should. Estimates of long-run demand elasticity are over 0.5: http://www.allianceforwaterefficiency.org/uploadedFiles/Resource_Center/Library/rates/White-Paper-Rate-Structures-and-Conservation-March-13-2009.pdf http://www.allianceforwaterefficiency.org/uploadedFiles/Reso... (p. 3). That means say doubling water/sewer rates could reduce demand significantly, while raising revenue to address maintenance back logs. The effect on the poor can be mitigated by, e.g. regulated pricing for the first X gallons per month.

ericd 7y ago
I'm absolutely not arguing against proper water pricing, I agree that the price should be increased to try to decrease waste. I'm arguing against privatization. Good point about the elasticity, I should have said it's very inelastic up to the point where the necessity is met, and then it becomes much more elastic.
- rayiner 7y ago
  Privitization is in theory an orthogonal issue. In practice, public water entities can't be trusted to price water appropriately because they're too heavily influenced by short-term political demands.