Key considerations in applying microeconomic theory to water quality issues

Abstract

Statements, such as those that suggest that all the world's population has a right to fresh potable water supplies or that those who polluted water should be made to clean it up, are usually made without recourse to the costs and benefits of segregating water according to its quality. The purpose in this paper is to demonstrate the value that economic thinking can add to issues surrounding water quality by addressing four key questions. First, who would benefit from differentiating water quality? Second, given the multitude of quality types that exist, is it possible to specify a finite set of manageable categories that can be assessed? Third, can the costs of treating water to change its qu..