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by s1artibartfast
1496 days ago
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It is not the price of a gallon that is being paid, but the right to use a gallon for all time. There are indeed high frictions, mostly in the form of upfront capital costs. If you want to buy a farmers water, they want to be compensated for sunk capital and future earnings. They bought land, planted it, drilled wells, and have 30+ years of future earnings, after which, they could sell their rights. In short, the relevant market is for the water rights, not the water itself. |
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