“It is remarkable to me how few people in the public sphere are making theses relatively straightforward points”

Tyler Cowen:

I am now reading quite a few analyses of the problem, and so few mention price!  Even when written by economists.  I find this article somewhat useful:

“We are a city with very high levels of poverty, and it’s difficult for us to raise the rates enough to do large scale replacement type projects and not make it unaffordable to live in the city of Jackson,” said former city councilman Melvin Priester Jr.

Yet the cost of Jackson’s poor quality water is still passed on to families who don’t trust the tap and purchase bottled water — which can cost a family of four $50-$100 a month — to drink instead.

The city raised water rates in 2013, but the Siemens deal penned the same year came with an onslaught of problems, including the installation of faulty water meters and meters that measured water in gallons instead of the correct cubic feet. This made any benefits of the rate increase virtually impossible to see.

The results have been nonsensical. Over the past several years, the city has mailed exorbitant bills to some customers and none to others. Sometimes, the charges weren’t based on how much water a household used and other times, city officials advised residents to “pay what they think they owe.” Past officials said the city lacked the manpower and expertise in the billing department to manually rectify the account issues with any speed.

In trying to protect people during the persistent billing blunders, the city has at times instituted no-shutoff policies, which demonstrate compassion but haven’t helped to compel payment.