NMSU Business Outlook: May 2011

Adjusting Prices for Externalities: Part 2 of 3

Suzenne Conner, PhD student, NMSU; Michael R. Hyman, Stan Fulton Professor of Marketing, NMSU

Assuming a price reflective of the total societal cost is calculable, is it possible to allocate the cost burden equitably? The answer requires consideration of several who, what, and how questions. Industry-level profits, historical acceptance of business practices by consumers, and consumers’ willingness to pay, influence the allocation of costs between producers and consumers.

Complete Article: Adjusting Prices for Externalities: Part 2 of 3

Pricing Water in New Mexico

Tom McGuckin, NMSU Department of Economics; Susan Kelly, UNM School of Law; Kyle S. Harwood, Attorney

Water utilities are high fixed-cost enterprises with relatively low variable operating costs. The treatment costs of ground water continue to grow with increasing regulation and decreasing water quality. In addition, most water utilities also operate sanitary sewerage systems. Utility physical facilities constitute large capital investments, giving water utilities one of the highest ratios of capital costs to sales volumes of any industry.

Complete Article: Pricing Water in New Mexico

Talking Points

Christopher A. Erickson and James Libbin

Complete Article: Talking Points

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