In the 90s, San Diego got cut very hard compared to Los Angeles. It's not always obviously good to tax roads or to price water, but in general, according to scarcity. Pricing it would be a good idea, but it does depend on what you do with the money. Singapore has one of the better water utilities in the world and they use that money to build a reliable system.
David Zetland of Leiden University College in the Netherlands and author of Living with Water Scarcity talks with EconTalk host Russ Roberts about the challenges of water management. Issues covered include the sustainability of water supplies, the affordability of water for the poor, the incentives water companies face, and the management of water systems in the poorest countries. Also discussed are the diamond and water paradox, campaigns to reduce water usage, and the role of prices in managing a water system.