Fundamentally, the price of something reflects an interaction between its supply and how much people want it (....its demand). That simple statement subsumes a whole lot of complexity that in practice can make either predicting the future price of things difficult, or subverts the relationship between supply and demand. This interesting recent article in the NYT argues that the price of water is too cheap.....particularly for farmers.
http://nyti.ms/1EVGzg5
Eduardo Porto argues that the way water is distributed and sold makes it very difficult to manage and conserve water in the face of increasing demand and dwindling supply. For example, in drought stricken CA many residents of Sacramento get charged a flat rate no matter how much water they use.
On the other hand, there are a number of compelling reasons for why water is not treated just like another commodity. Many people feel that access to water is a fundamental human right. Also, the cheap water that farmers have access too comes with some big societal benefits, namely cheap food. What do you think?
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