Coase Colored Glasses

Sunday, March 06, 2005

Creating Market Incentives In Nevada Water Consumption

George Will has a column discussing Nevada water consumption here. In the piece Mr. Will describes the water problem facing the gambling state and how it is using economic incentives to solve the consumption problem. Nevada is apparently giving landowners $1 per square foot of grass removed, which has resulted in an “annual savings of 2.8 billion gallons of water.” Property owners had not been responding as much to 40 cents per square foot removed so the city upped the price.

Nevada could have likely relied on federal handouts especially with Harry Reid holding so much clout in the senate, instead the state did what was intended by the founders of this country it used local means to solve local needs rather than relying on the federal government to solve its problems. By relying on economic incentives Nevada has allowed those who want that lawn of Kentucky Bluegrass to have it if they feel the aesthetic and existence values outweigh the possible $1 per square foot of grass that could be in their pocket.

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