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Economy

Headline of the Day

By Matt Simpson on Jun 25, 2008

"Rains clog sewer system, residents asked to limit toilet use," the Kansas City Star reports. The hilarity of this headline should be apparent to anyone with a bit of schooling in economics. According to the article:

The Kansas Department of Health and Environment issued a statement Wednesday urging Sublette residents to curtail water usage and use toilets as little as possible. The statement said sewers will remain shut down until further notice.

I sincerely doubt that this statement will have much of an effect on water usage. A much more effective way to curtail water usage would be to simply raise prices, much like a private provider would do when the costs of supplying water temporarily but dramatically increase. In response to the higher price, water consumers would cut back on consumption. Only when the benefit to the consumer outweighed the cost to the water producer would water be consumed.

Admittedly, this is an imperfect solution because, as the article alludes to, the primary problem is not in water usage per se, but in the sewers. Ideally, sewage companies would be able to charge for each flush independent of how much water it uses, but this may be impractical. If these services were privatized, they might be provided by different companies, but the sewage company would have a strong incentive to pay the water company to raise prices.

Under the current system, both Kansas and Missouri get bureaucratic proselytization about when they can and can’t flush, rather than actual results, and that just stinks.

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Matt Simpson

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