Conceptual Columns

Paradox of value

A term that describes the phenomenon of the market price of goods essential to life, like water, being way lower than that of goods that are non-essential, like diamonds. It is also called the diamond-water paradox. Even though water is much more valuable to life than diamonds, its abundant availability — as compared to diamonds — causes its marginal value to buyers to be lower than that of diamonds. Hence, water usually costs much lesser than diamonds, unless there is a huge scarcity in its availability. In that case, both the marginal value and price of water would be way higher.

Related Topics
This article is closed for comments.
Please Email the Editor

Printable version | Jan 14, 2021 7:17:35 AM | https://www.thehindu.com/opinion/columns/paradox-of-value/article18523022.ece

Next Story