BSR Insight | What’s the True Value of Water?
Two thousand years before Adam Smith compared water and diamonds to differentiate between two separate meanings of "value," Plato observed: "Only what is rare is valuable, and water, which is the best of all things ... is also the cheapest." Both were expressing that the market price of an item does not reflect its true value. Market price reflects the fluctuating circumstances of daily life, whether the vagaries of supply or demand, while the true value is something more basic, enduring, and stable. This true value of water has been perceived differently at varying times. With the price of water increasing faster than U.S. inflation and any other utility service, we may finally be entering an era where the market price of water more accurately reflects its true value for people and for ecosystems.
Source: J. Beecher, Institute of Public Utilities Regulatory Research and Education, MSU. March 2012.
About the Author(s)
Linda Hwang, Former Manager, Research
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