We can see water, we can feel water, we can drink water, we can use water in many ways. However, we cannot measure its worth with a dollar price. We can only arbitrarily assume a price when we suffer an economic loss due to insufficient water or even excessive water.
The old cliche is that one never misses water until the well goes dry. Obviously, the value of water becomes subjective for ever user who depends upon, and is affected, by water. When there is not enough water available to satisfy demand, we likely highly value it. When rain events or rivers flood our land with too much water, our valuation likely diminishes. This result is only human.
Direct, quantitative calculation of the value of water is impossible. Indirect measurement using a surrogate, such as the cost of crops due to drought, provides a speculative economic impact that may have resulted from influences in addition to lack of water. Further, calculating the dollar value of a water source, such as an aquifer, necessarily must be based upon assumptions, not hard evidence. For example, the extent of ground water below the Earth's surface is not fully known and is affected by the rates of rain events and withdrawals.
Clearly, ratemaking for water service cannot be predicated upon the subjective valuation of water by each user. More importantly, rates do not compensate for the price of water. They compensate for the price of water service received by each user.
So, it is possible to conclude that water has infinite value, which cannot be measured and is incapable of price. In other words, it is invaluable and priceless. This infinite value of water, however, should be acknowledged. For example, we know that fresh water on earth does have some finite amount, so its value must be recognized by conservation and wise use.
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