Liquid Markets

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Credit: redhanded

Credit: redhanded

What do you do when there's not enough of something to go around? A lot of economists say, "Put a price on it!" So that's what Australia did with water. On today's show, we continue our series on the economics of water in the driest inhabited continent on Earth.

Australia's Murray-Darling Basin has one of the world's most advanced water markets. Water can be bought by the highest bidder. In theory, this means water goes to its best use. But local farmers like Carly Marriott are frustrated by high water prices.

So what happens when dry economic theory meets sloshy, sloppy reality?

Further reading:

- Murray-Darling Basin water markets inquiry

- Neal Hughes and his team's report on economic benefits of water trading in the southern Murray-Darling Basin

- Scott Hamilton and Stuart Kells – Sold Down the River: How Robber Barons and Wall Street Traders Cornered Australia's Water Market

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