More Water Dilemmas

by Elaine Schwartz    •    May 26, 2010    •    1047 Views

Bottled water has been around for a long time. Bottled Perrier was introduced in 1863 while people first drank a bottled Poland Spring product 13 years later. With bottled water consumption having increased until the recent economic contraction, environmentalists are hoping to perpetuate diminished sales.  As economists, deciding whether or not to drink bottled water is a classic opportunity cost dilemma.

Opponents of bottled water cite alternative potential for the energy and materials used to manufacture and transport plastic bottles. As for the water, preserving natural springs is a priority as is the goal of diminishing corporate influence over our water supply.  

Claiming that they are taking “water in a sustainable way,” Nestle, and other bottled water supporters are the source of jobs and a product. For the aspirational drinker, they claim that sipping a San Pellegrino is a “trendy statement.”

A current battle is being fought over the water that Cascade Locks, Oregon can provide to Nestle. Ideally located for the Northwestern U.S. market, Cascade Locks, a town with 18% unemployment, would enjoy new jobs and tax revenue from Nestle. The local Fish and Wildlife Department supports Nestle’s plan to bring more water to their hatchery and to preserve its aquatic residents. The environmentalist community, though, is concerned about Nestle’s control of a spring, their impact on wildlife, and their takeover of municipal responsibilities.

The Economic Lesson

The choice is between buying and not buying bottled water. Perhaps we can best make a decision when we consider the benefits associated with each alternative and then determine what we are willing to sacrifice. If we do not buy bottled water then the opportunity cost is making the purchase. Correspondingly, we sacrifice such benefits as more jobs for Cascade Locks and tax revenue. All that we sacrifice is the cost of the decision.


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