Price increases after disasters.Whe

Price increases after disasters.
When a disaster such as hurricane strikes a region, many goods experience an increase in demand or a decrease in supply, putting upward pressure on prices. Policymakers often object to these price hikes, but this opinion piece endorses the market’s natural response.
In price gouging reverse looting?
By john carney. Four dollars for a can of coke. Five hundred dollars a night for a hotel in downtown Brooklyn. A pair of D-batteries for $6.99. these are just a few of the examples of price hikes I or friends of mine have person-ally come across in the run-up and aftermath of hurricane sandy. Price gouging, as this is often called, is a common occurrence during emergencies. Price gouging around natural disasters is one of the things politicians on the left and right agree is a terrible, no good, very bad thing. New York Attorney General Eric Schneiderman sent out a press release warning “against price inflation of necessary goods and services during hurricane sandy”. New jersey governor chris Christie issued a “forceful reminder” that price gouging “will result in significant penal-ties”. hotlines have been established to allow consumers to report gouging. new jersey’s law is very specific. Price increases of more than 10 percent during a declared state of emergency are considered excessive. A new jersey gas station paid a $50.000 fine last year for hiking gasoline prices by 16 percent during tropical storm Irene. New york’s law may be even stricter. According to AG Shneiderman’s release, all price increases on “necessary goods and items” count as gouging. “General Business Law prohibits such increase in costs of essential items like food, water, gas, generators, batteries and flashlights, and services like transportation, during natural disasters or other events that disrupt the market,” the NY AG release said. These laws are built on the quite conven-tional view that it is unethical for a business to take advantage of a disaster in pursuit of profits. It just seems wrong forbusiness owners to make money on the misery of their neighbors. Merchants earning larger profits because of a disaster seem to be rewarded for doing nothing more than raising their prices. “it’s reverse looting,” a neighbor of mine in Brooklyn said about the price of batteries at LOCAL ELECTRONIC STORE. Unfortunately, ethics runs into economics in a way that can make these laws positively harmful. Price gouging can occur only when there is a shortage of the good in demand. If these were no shortage, normal market pro-cesses would prevent sudden price spikes. A deli owner charging $4 for a can of pepsi would discover he was just driving customers to the deli a block away, which charges a buck. But when everyone suddenly starts buy-ing batteries or bottles of water for fear of a blackout, shortages can arise. Sometimes there simply is not enough of a particular good to satisfy a sharp spike in demand. And so the question arises: how do we decide which customers get the batteries, the gro-ceries, the gasoline? We could receive a ticket at the grocery store. Win-ners would get to hungry. Or, more likely, they would be forced to buy the food away from the lottery winners—at elevated prices no doubt, since no one would buy food just to sell it at the same price. So the gouging would just pass from merchant to lottery winning customer. We could have some sort of rationing pro-gram. Each person could be assigned a por-tion of the necessary goods according to their household need. This is something the U.S resorted to during world war 2. The problem is that rationing requires an immense amount of planning—and an impossible level of knowledge. The rationing bureaucrat would have to know precisely how much of each good was available in a given area and how many people would need it. Good luck getting that in place as a hurricane bears down on your city. We could simply sell goods on a first come, first serve basis. This is, in fact, what anti-gouging laws encourage. The result is all too familiar. People hoard goods. Store shelves are emptied. And you have to won-der, why is a first to the register race a faire system than the alternative of market price? Speed seems a poor proxy for justice. Allowing prices to rise at times of extreme demand discourages overconsumption. Peo-ple consider their purchases more carefully. Instead of buying a dozen batteries (or bottles instead of water or gallons of gas ), perhaps they buy half that. The result is that goods under ex-treme demand are available to more custom-ers. The market process actually results in a more equitable distribution than the anti-gouging laws. Once we understand this, it’s easy to see that merchants aren’t really profiting from di-saster. They are profiting from managing their prices, which has the socially beneficial effect of broadening distribution and discourag-ing hoarding. In short, they are being justly rewarded for performing an important publi

Kết quả (Việt) 1:

Tăng giá sau thiên tai.Khi một thiên tai như bão tấn công một khu vực, nhiều hàng hoá trải nghiệm một sự gia tăng nhu cầu hoặc giảm trong việc cung cấp, đưa lên áp lực về giá. Hoạch định chính sách thường xuyên đối tượng để những giá tăng vọt, nhưng này mảnh ý kiến xác nhận của thị trường phản ứng tự nhiên.Tại giá gouging đảo ngược cướp bóc?By john carney. Four dollars for a can of coke. Five hundred dollars a night for a hotel in downtown Brooklyn. A pair of D-batteries for $6.99. these are just a few of the examples of price hikes I or friends of mine have person-ally come across in the run-up and aftermath of hurricane sandy. Price gouging, as this is often called, is a common occurrence during emergencies. Price gouging around natural disasters is one of the things politicians on the left and right agree is a terrible, no good, very bad thing. New York Attorney General Eric Schneiderman sent out a press release warning “against price inflation of necessary goods and services during hurricane sandy”. New jersey governor chris Christie issued a “forceful reminder” that price gouging “will result in significant penal-ties”. hotlines have been established to allow consumers to report gouging. new jersey’s law is very specific. Price increases of more than 10 percent during a declared state of emergency are considered excessive. A new jersey gas station paid a $50.000 fine last year for hiking gasoline prices by 16 percent during tropical storm Irene. New york’s law may be even stricter. According to AG Shneiderman’s release, all price increases on “necessary goods and items” count as gouging. “General Business Law prohibits such increase in costs of essential items like food, water, gas, generators, batteries and flashlights, and services like transportation, during natural disasters or other events that disrupt the market,” the NY AG release said. These laws are built on the quite conven-tional view that it is unethical for a business to take advantage of a disaster in pursuit of profits. It just seems wrong forbusiness owners to make money on the misery of their neighbors. Merchants earning larger profits because of a disaster seem to be rewarded for doing nothing more than raising their prices. “it’s reverse looting,” a neighbor of mine in Brooklyn said about the price of batteries at LOCAL ELECTRONIC STORE. Unfortunately, ethics runs into economics in a way that can make these laws positively harmful. Price gouging can occur only when there is a shortage of the good in demand. If these were no shortage, normal market pro-cesses would prevent sudden price spikes. A deli owner charging $4 for a can of pepsi would discover he was just driving customers to the deli a block away, which charges a buck. But when everyone suddenly starts buy-ing batteries or bottles of water for fear of a blackout, shortages can arise. Sometimes there simply is not enough of a particular good to satisfy a sharp spike in demand. And so the question arises: how do we decide which customers get the batteries, the gro-ceries, the gasoline? We could receive a ticket at the grocery store. Win-ners would get to hungry. Or, more likely, they would be forced to buy the food away from the lottery winners—at elevated prices no doubt, since no one would buy food just to sell it at the same price. So the gouging would just pass from merchant to lottery winning customer. We could have some sort of rationing pro-gram. Each person could be assigned a por-tion of the necessary goods according to their household need. This is something the U.S resorted to during world war 2. The problem is that rationing requires an immense amount of planning—and an impossible level of knowledge. The rationing bureaucrat would have to know precisely how much of each good was available in a given area and how many people would need it. Good luck getting that in place as a hurricane bears down on your city. We could simply sell goods on a first come, first serve basis. This is, in fact, what anti-gouging laws encourage. The result is all too familiar. People hoard goods. Store shelves are emptied. And you have to won-der, why is a first to the register race a faire system than the alternative of market price? Speed seems a poor proxy for justice. Allowing prices to rise at times of extreme demand discourages overconsumption. Peo-ple consider their purchases more carefully. Instead of buying a dozen batteries (or bottles instead of water or gallons of gas ), perhaps they buy half that. The result is that goods under ex-treme demand are available to more custom-ers. The market process actually results in a more equitable distribution than the anti-gouging laws. Once we understand this, it’s easy to see that merchants aren’t really profiting from di-saster. They are profiting from managing their prices, which has the socially beneficial effect of broadening distribution and discourag-ing hoarding. In short, they are being justly rewarded for performing an important publi