Thursday, May 08, 2014

Raise the Price of Water in California

Read this NY Times piece about coping with drought in California.   Starbucks charges $2 for a coffee and many,many people buy it.  A gallon of water in Los Angeles costs .5 cents.  Is that the market price today?  Raise the price to 2 cents a gallon and watch "the great shortage" vanish as people pull out their green grass and find many other low cost adaptation strategies.  Why do you fear market solutions?