In a recent article in this journal, Luby, Polasky, and Swackhamer come to the provocative conclusion that urban water prices in the United States are “cheaper when drier.” They also argue that utilities fail to provide affordable water and that they charge less for “additional” use compared to “essential” use. We challenge these claims. While the authors correctly point out the many challenges that utilities face in supplying affordable water while meeting conservation and revenue goals, there are serious flaws in their measures of price, scarcity, and affordability. These measurement problems lead the authors to incorrect conclusions about water pricing in the United States. Using improved measures of price and water scarcity, we find little statistical relationship between the marginal price of water/sewer services and scarcity. Our findings cast doubt on Luby et al.'s findings and point to important avenues for future research.
Our examination and reanalysis of water pricing… does not support Luby, et al.’s main claim that U.S. water prices are ‘cheaper when drier.’ Once improved measures of prices and scarcity are applied, there appears to be no meaningful relationship between scarcity and price.
Switzer, David & Manuel P. Teodoro. 2019. “Comment on ‘U.S. Urban Water Prices: Cheaper When Drier,’ by Luby, Polasky, and Swackhamer,” Water Resources Research 55: 6316–6321.