#ValueOfWater #GoldVsWater #ResourceManagement
Have you ever stopped to wonder why things that everyone needs, like water or food, are often valued less than things that only a few need, like gold or silver? 💧🍴
– We all need water to survive, yet it’s relatively cheap compared to precious metals like gold. Why is that?
– Is the abundance of water making it less valuable in our society?
– Should we be reevaluating the way we value essential resources like water?
I believe that part of the solution lies in increasing awareness about the importance of water conservation and sustainable resource management. By educating ourselves and others about the value of water, we can work towards ensuring that this essential resource is properly valued and protected for future generations. Let’s start a conversation about this important issue! 💬 #WaterConservation #SustainableLiving
Economists often say that price is set by supply and demand.
Now, because water is something everyone needs there is a lot of demand. However, because water is widely available on the planet there is also a lot of supply. As you say, because it’s abundant that makes it cheap.
Prices are set by the situation in a particular market at a particular time. In a desert water may be more expensive than it is close to a river. Different types of water (such as bottled water) may be more or less expensive than others. It is these local decisions that make all the difference.
This is the diamond water paradox and was a large question in price theory for centuries…until marginalism solved it. Basically, price reflects the marginal value of a good, not the total or average value. The price of water is low because its abundance means the last unit consumed was very low value – think about the last cup of water that you used, maybe it just went down the drain.
So price reflects marginal value (and marginal cost) which is not to say how much is water worth versus not having any.
https://en.wikipedia.org/wiki/Paradox_of_value