Water Allocation: The Roles of Value and Prices

Curt L. Anderson
Jerrold M. Peterson

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DOI: 10.2190/X9WE-03K8-NJE9-Y0J9

Abstract

Fresh water may no longer be considered as a free resource by society. The demands for water with reasonable quality characteristics have surpassed available supplies in many regions of the United States. This will likely lead to major changes in state and national water policy as the need to more effectively allocate the available water supplies becomes necessary. This article discusses some of the basic economic principles which may serve as guidelines for this allocation. In particular, the distinction between the value of water and the appropriate price of water are discussed as well as their roles in efficient water allocation.

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