Price Gouging | Is It Good In Case Of Emergencies Like In Hurricane Harvey ?
If you watch news regularly, then you must know about the Hurricane Harvey which stuck the Houstan, Texas recently. There has been a complete chaos in that area and people have to go through worse circumstances to survive there. As per a report, Hurricane Harvey is considered the strongest storm which impacted Texas in 50 years.
But Sellers and store owners have a different psychology for it. According to them, this Price Gouging is necessary for the greater good when it comes to serve the people right in these circumstances. There has been a shortage of necessities supplies, shortage of power and gas in that area. So, people have to survive on less things until the situation clears out.
Let's take the Price Gouging topic now. First understand its meaning:
Price Gouging is a practice to increase the prices of goods, commodities and services to such an extent which crosses the limit of reasonability due to some extreme and unethical event.
In simple words, price hike by sellers on necessary good, commodities and services in case of some unforseen events like Natural Disasters, Artifical Disasters or an extreme shortage of goods and commodities.
Generally, Price gouging has been considered a dark practice and unethical when it comes to providing necessities in case of some emergencies. There are strict laws against price gouging in every part of the World, especially in Texas.
But Currently, price gougig are being practiced more commonly than ever in Texas.
So, What are your thoughts about Price Gouging?
As per the Sellers or store owners in Texas, Price Gouging helping them to provide supplies to the needy people instead of anyone and everyone which don't even need those goods or commodities.
A bottled water case costs $100 and price of Gas costs around $10 per Gallon in Texas currently which is just insane.
But Sellers and store owners have a different psychology for it. According to them, this Price Gouging is necessary for the greater good.
Let's assume a person needs only one case of Water bottles, but if the price remains the same, then he will buy as many cases as he can just to store it and killing the opportunity of getting that water in favor of someone needy. If the price remains same, people will misuse it in extreme situations or just take advantage of it to gain some profit and exploit other people.
High prices will indeed cause some problems to people but it would definitely solve the problems of demand and supply. With high prices, demand remains in control and people would buy only those things of utmost need. They would never try to stockpile goods just to black market it later.
Well, as far as this theory is concerned, I am also in favor of this practice. I know it's unethical in some consequences, but in case of Emergencies, some hard decisions has to be taken in order to benefit a much larger population.
Price Gouging is certainly a bad practice but if we consider the situation in case of emergencies, then logically it makes kind of logic certainly.
Now, Tell me your views in the comment section about Price Gouging in case of Emergencies.
Thanks for reading !!
Of course you can limit the availability to many people by raising the price and therefore making them just buy what they need.
However what about the poor ones? The poor people are the ones, who usually suffer the most from such emergencies. They have weaker homes, live in worse areas, have less stored food/water, ...
And in the end, some people will always have enough money to still buy up the water if they want to.
In order to truly spread rare ressources in a fair and equal way, you would have to limit the amount which is sold per person! No buying of larger amounts for anyone, even if they would pay ten times the price.
Just my opinion :)
Price gouging seems to be a natural result of supply and demand.
However, it can become dangerous when it unjustly denies a person what they need to survive.
If you look at the other end of the spectrum- looting- You can ask the same questions.
It seems to unacceptable unless it's a persons only chance for survival.
Very interesting article. Do you think it would be a good practice to increase the price on the first day and let it slowly decrease after time? In that way people will only buy what they certainly need and nobody will stock food they have recently bought because it loses its value. The only problem with it is that this is ruining the supply - demand equilibrium since the price should decrease and the supply is unknown.
What do you think?
Price is a signal. When someone can get 5000% above his cost on a product, it's a signal to others that there is profit to be made, and this attracts more sellers of that product to the market, which expands supply. Restricting this just reduces supply at a time when it's most needed. It's stupid and counterproductive.