On: California Imposes First-Ever Water Restrictions t...

[nostromo]

California needs to raise the price of water.

Isn't it ironic that water in Seattle (which has an embarrassment of riches when it comes to fresh water) is more expensive than it is in SF and LA?

http://www.circleofblue.org/waternews/wp-content/uploads/201...

If you want people to use less water, simply raise the price.

[jseliger → nostromo]

California needs to raise the price of water. [. . .] If you want people to use less water, simply raise the price.

This is absolutely correct and Alex Tabarrok just wrote a similar post on Marginal Revolution: http://marginalrevolution.com/marginalrevolution/2015/03/the...

[oasisbob → nostromo]

Or, to flip that around -- if your residents use less water, the price per gallon will increase. Seattle has nearly the lowest per-capita water usage on that list.

http://www.circleofblue.org/waternews/2010/world/u-s-urban-r...

[pkaye → nostromo]

The other way is if other states would grow more agriculture so there is more diversity.

[mikeash → pkaye]

Other states might grow more if their California competition wasn't subsidized so heavily with water.

[pkaye → mikeash]

Do you have any evidence of this that they are not growing more because California subsidizes water usage?

[mikeash → pkaye]

Just basic economics. Subsidies increase supply which reduces prices. Lower prices discourage production. Net result is that production shifts to the place with the subsidies.

[pkaye → mikeash]

So your suggestion is to get rid of the subsidies?

[mikeash → pkaye]

My suggestion is that we'd be better off if they weren't there. That doesn't necessarily suggest a plan of action, though, since just dropping long-existing subsidies can cause a lot of problems. I don't know what the solution is, but I think the goal should be to charge farmers something like the fair value of the water they consume.