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If I disagree with the price of a potato, I can buy rice. Food is price elastic in so far as I have options in what food to buy for what purpose. That said, ind

If I disagree with the price of a potato, I can buy rice. Food is price elastic in so far as I have options in what food to buy for what purpose. That said, indeed in my country and a number of others there are certain food stuffs which may not be legally taxed via VAT as they are considered necessary for daily survival. Water is completely price inelastic economically. There is no alternative to it and it is essential to the persistence of life. Should it be priced? If it requires labour or other external factors that bear cost, sure. Should its price be tweaked as an economic lever? Even if that worked (it wouldn't for something inelastic like water anyway) I would still say no. Using water's price as a disincentive can only possibly work in non-essential use cases, which doesn't seem to be the case in this Australian example.

nickthemagicman 7y ago
This exactly.
nshepperd 7y ago
Demand for drinking water is inelastic. That's a tiny fraction of a fraction of usage. The majority of fresh water is used for farming, as coolants, solvents, reagents in industrial processes. These uses certainly do have alternatives, whether switching to alternative crops, developing more efficient manufacturing methods, building desalination plants. If that happened there would be more water available for essential use cases like drinking.
- michaelscott 7y ago
  Absolutely, this is the ideal. All the examples you mentioned are what I would class in my previous comment as non-essential use cases (as in there are alternatives). Certain alternatives such as desalination and water reclamation in industrial processes don't change the elasticity of water economically; it's still required. They just increase the amount available in the pool (excuse the pun) and even then these too bear cost for implementation and maintenance and would not be provided free (which makes sense).

nickthemagicman 7y ago

This exactly.

nshepperd 7y ago

Demand for drinking water is inelastic. That's a tiny fraction of a fraction of usage. The majority of fresh water is used for farming, as coolants, solvents, reagents in industrial processes. These uses certainly do have alternatives, whether switching to alternative crops, developing more efficient manufacturing methods, building desalination plants. If that happened there would be more water available for essential use cases like drinking.

michaelscott 7y ago
Absolutely, this is the ideal. All the examples you mentioned are what I would class in my previous comment as non-essential use cases (as in there are alternatives). Certain alternatives such as desalination and water reclamation in industrial processes don't change the elasticity of water economically; it's still required. They just increase the amount available in the pool (excuse the pun) and even then these too bear cost for implementation and maintenance and would not be provided free (which makes sense).