More on Bottled Water Bans and Substitution Effects
Wednesday August 27, 2008
My original piece: Bottled Water Bans and Substitution Effects.
EclectEcon asks a number of questions as well, but gets to the heart of the matter with:
It'd make for a great economics project - that is if the city would allow someone to come in and play with the price of their beverages for a few months.
EclectEcon asks a number of questions as well, but gets to the heart of the matter with:
But even if they are, why just water bottles? Why not other plastic bottles, too?The implicit assumption in all this is that fountain water and bottled water are near perfect substitutes (if so, then why would anyone pay for bottled water?) but fountain water and bottled juice are not. A fun little study would be for the city to measure the cross price elasticity of demand between the various products to determine how substitutable consumers see the two goods. I would not be surprised if the quantity demanded for juice rose more (in percentage terms) than the quantity demanded for fountain water after a rise in the price of bottled water. If that is the case, then this ban will do little to reduce plastic bottle usage - which makes the decision to ban only bottled water (and not all bottled drinks) a little curious.
It'd make for a great economics project - that is if the city would allow someone to come in and play with the price of their beverages for a few months.
Comments
Recently the Hopkins Cancer research center have sarted to clain that bottled water is dangerous to potential cancer victims because certain molecules from the plastic get into the water and that they can help cancer cells to grow.
I do not know if this is true and I am sure that the water bottlers would claim the opposite, but to be on the safe side at least, your readers should be aware of this item of news.