04 April 2008

Drugs in Water 2

There are several follow-up stories on the earlier report of drugs in water:

Phoenix (among other places, I am sure) has announced testing. Although they were probably ashamed that journalists detected "contaminants" in their water, they are probably doing tests to stop a barrage of phone calls from customers.

An unusual suggestion is that people recycle their unused drugs, i.e., take them back to the pharmacy to get a refund. Although I knew that folks often dump their extra drugs in the toilet, I was surprised to hear that nursing homes, hospitals, etc. dump prescribed, but unopened drugs in the toilet. Given the harm this causes to the water supply and increase in cost it represents (Colorado allows drugs to be returned.), ending this "dumping" may kill two birds -- dirty water and higher health care costs -- with one stone.

Bottom Line: Everything is linked, but delegated costs and benefits (or principal-agent relations) complicate things: Mr. X dumps Mr. Y's drugs in the water, and Mr. Z pays for those drugs. Mr. A is supposed to clean that water so Mr. B can drink it, but it's Mr. C who points out Mr. A is not doing his job. If Mr. Y dumped his drugs in Mr. B's glass of water, Mr. B could take care of the problem directly (punch!), but our world is much more complicated than that.

1 comments:

agEconomist said...

I realy like the analogy in the last paragraph. It explains so many environmental problems, and encompases so many conceptss ( principal agency problems, externalities, etc) in a very pithy and compact manner.