Discussing, estimating or analyzing the value of water is a difficult task.
In addressing the value of water as reflected in its price - either as cha
rged by a water utility, as the price of a water transfer, or a water sale
in some market - this paper will examine three propositions regarding water
pricing. The paper will consider the marginal scarcity rent of water, esti
mates of externalities, the full cost pricing of water and the consequences
of these considerations on water prices, transfers and the efficiency of w
ater use.