Water marketing can be both positive and negative economic system. For example, on a positive aspect, economic theory state that markets and prices play a role in allocation of resources among competing uses and they provide incentives to conserve and invest in new supplies (Frederick, 2001). This theory can be applied to water use in a competitive economy.
Secondly, water marketing can lead to price adjustments due to supply and demand. According to Frederick (2001), it is noted that when demand increases faster than supply prices would ultimately rise (Frederick, 2001). He explains that higher prices provide incentives to use less, to produce more, and to develop and adopt technologies that conserve use and increase output. Markets enable resources to move from lower to higher-value uses as conditions change (Frederick, 2001). For example, it should be noted that water, which was traditionally used for irrigation, could be more valuable as a municipal water source. Frederick (2001) explains that tradable water rights potentially encourage conservation and a more economically efficient allocation of scarce water resources (Frederick, 2001).
Currently, we know that water is underpriced. However, this should not be the factor to make water an expensive commodity. Equity should be considered before water marketing is incorporated in our economic system. My argument is based on the fact that if water is marketed, poor people will no be able to afford to have water and we all know that water is life.