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But rapid price inflation for certain goods seems much more likely in the context of a natural disaster. Without a coordinated response, for a certain amount of

by nmrm2 11y ago

But rapid price inflation for certain goods seems much more likely in the context of a natural disaster. Without a coordinated response, for a certain amount of time there will only be X tents reachable from the affected area, where # of people who need tents >> X. Ditto for vaccines and non-perishable food. Absent (enforced) price controls or incredibly nimble infrastructure repair, rampant price inflation for bare essentials seems more likely than not. (edit to avoid further confusion: The point of this post is simply to point out that local economies behave very differently after a disaster. In particular, if you need X of something in order for people to not die and you only have << X available (perhaps 0), then cash handouts aren't really helpful in the short-term.)

rosser 11y ago
As the kids say, "pics or it didn't happen." Show me cases of price gouging for vaccines during an outbreak, or tents during a disaster or whatever. (And not just isolated assholes attempting to profiteer, either — because there's always going to be "that guy" — but systemic inflation.) Otherwise, all I'm hearing is a lot of "seems" and "shoulds", which sounds pretty belief-based to me, particularly when I keep seeing evidence to the contrary.
- yummyfajitas 11y ago
  For example: http://www.theguardian.com/environment/2011/aug/16/africa-famine-food-prices-world-bank http://www.theguardian.com/environment/2011/aug/16/africa-fa... Or: http://newsroom.uber.com/nyc/2012/11/hurricane-sandy-pricing-update/ http://newsroom.uber.com/nyc/2012/11/hurricane-sandy-pricing... (Note that inflation was systemic, because Uber basically became the entire market. Yellow cabs, which couldn't inflate their prices, just stayed home.) No matter how much economic denialism you want to engage in, you still can't magically make scarce things plentiful. Similarly, I can complain about how much my server monitoring sucks, but that doesn't mean my latency isn't high.
  - deleted 11y ago
    [deleted]
  - rosser 11y ago
    I don't think your Uber example counts. Yes, they were paying 2x to drivers, in order to get them out on the road and meeting the needs of their users, but they were charging riders 1x. The other example is closer to what I'm looking for, but I'm not convinced it's entirely what I'm talking about, either. Yes, there was a (broadly) localized price increase, but it was in the context of a global price up-trend (which can be blamed on biofuels as much as it can poor harvests). Your cited article points out that global corn prices, for example, were up 84%, and had doubled (or, up 100%) in the horn of Africa. (About which, btw: we're talking about one of the most lawless places on the planet. I very much doubt the usual rules of economics apply unmodified in such an environment.) Those aren't egregiously divergent price increases.
    - yummyfajitas 11y ago
      "Later this morning we will be reverting back to standard Surge Pricing for riders..." I'm not sure why you believe the "lawlessness" of a region changes the laws of arithmetic. Scarcity is scarcity, regardless of whether the UN refuses to recognize your government.
    - Natsu 11y ago
      Maybe it's simpler to put it into an example: if there are exactly 3 loaves of bread on the only grocery store's shelf, then handing 100 locals $1,000 each does nothing to ensure that everyone will get fed. In that case, perhaps it makes more sense to use that money to deliver a large truck full of food to everyone. So it's important to have a clear idea of what is and isn't needed when trying to help people and that can depend very strongly on the circumstances they face.
- nmrm2 11y ago
  Price gouging of food/shelter/energy post-disaster is a fairly common phenomenon, and I don't think it really requires extensive discussion. See e.g. http://knowledgeproblem.com/2010/01/26/price-gouging-in-haiti/ http://knowledgeproblem.com/2010/01/26/price-gouging-in-hait... in the context of Haiti specifically. WRT vaccines in particular, please read my post as charitably as possible within the surrounding context of the thread -- I can only invest so much time in internet commenting and sometime my grammar isn't perfectly unambiguous. Sorry :-). To help crystallize the point I was making, I edited my parent comment. In general, as long as we're being pedantic, I suppose that "completely unavailable" -- meaning you can't locally buy a vaccine even for infinite money -- is a rather degenerate form of price inflation. And vaccine stores can be ruined by power outages, which are common during natural disasters. Edit: Also, my parent comment states "price inflation for bare essentials [immediately following a disaster]", not "systemic inflation" in the sense of a country or region's entire economy. Cash handouts may very well be an effective mechanism for providing long-term redevelopment aid to an area effected by a natural disaster; in fact, that's essentially what happens with insurance payouts when middle class areas of the US are hit by disasters. But redevelopment is quite different from emergency response, which is what this thread is about.
- jerf 11y ago
  This is Econ 101. What else do you expect a skyrocketing demand meeting a just-destroyed and rapidly plummeting supply to do? I think the onus is on you to somehow demonstrate that the price of goods would not be affected by such a blindingly obvious combination of supply and demand changes. I have no idea where you think this "evidence" is coming from that somehow in a disaster prices don't rise. If they don't, it would only because the entire market has been destroyed and "prices" don't even apply anymore.
- modoc 11y ago
  New England during a bad winter... During the bad ice storms a few years ago that left many areas, including mine, without power for a week+, things like generators, kerosene lamps and heaters, etc.. ranged from several times more expensive than usual to unavailable. During this past winter when ice dams were a massive issue in MA, national chain hardware stores were trucking in roof rakes and selling them for $150+ (normal prices of around $25-30).

by nmrm2 11y ago

rosser 11y ago

As the kids say, "pics or it didn't happen." Show me cases of price gouging for vaccines during an outbreak, or tents during a disaster or whatever. (And not just isolated assholes attempting to profiteer, either — because there's always going to be "that guy" — but systemic inflation.) Otherwise, all I'm hearing is a lot of "seems" and "shoulds", which sounds pretty belief-based to me, particularly when I keep seeing evidence to the contrary.

yummyfajitas 11y ago
For example: http://www.theguardian.com/environment/2011/aug/16/africa-famine-food-prices-world-bank http://www.theguardian.com/environment/2011/aug/16/africa-fa... Or: http://newsroom.uber.com/nyc/2012/11/hurricane-sandy-pricing-update/ http://newsroom.uber.com/nyc/2012/11/hurricane-sandy-pricing... (Note that inflation was systemic, because Uber basically became the entire market. Yellow cabs, which couldn't inflate their prices, just stayed home.) No matter how much economic denialism you want to engage in, you still can't magically make scarce things plentiful. Similarly, I can complain about how much my server monitoring sucks, but that doesn't mean my latency isn't high.
- deleted 11y ago
  [deleted]
- rosser 11y ago
  I don't think your Uber example counts. Yes, they were paying 2x to drivers, in order to get them out on the road and meeting the needs of their users, but they were charging riders 1x. The other example is closer to what I'm looking for, but I'm not convinced it's entirely what I'm talking about, either. Yes, there was a (broadly) localized price increase, but it was in the context of a global price up-trend (which can be blamed on biofuels as much as it can poor harvests). Your cited article points out that global corn prices, for example, were up 84%, and had doubled (or, up 100%) in the horn of Africa. (About which, btw: we're talking about one of the most lawless places on the planet. I very much doubt the usual rules of economics apply unmodified in such an environment.) Those aren't egregiously divergent price increases.
  - yummyfajitas 11y ago
    "Later this morning we will be reverting back to standard Surge Pricing for riders..." I'm not sure why you believe the "lawlessness" of a region changes the laws of arithmetic. Scarcity is scarcity, regardless of whether the UN refuses to recognize your government.
  - Natsu 11y ago
    Maybe it's simpler to put it into an example: if there are exactly 3 loaves of bread on the only grocery store's shelf, then handing 100 locals $1,000 each does nothing to ensure that everyone will get fed. In that case, perhaps it makes more sense to use that money to deliver a large truck full of food to everyone. So it's important to have a clear idea of what is and isn't needed when trying to help people and that can depend very strongly on the circumstances they face.
nmrm2 11y ago
Price gouging of food/shelter/energy post-disaster is a fairly common phenomenon, and I don't think it really requires extensive discussion. See e.g. http://knowledgeproblem.com/2010/01/26/price-gouging-in-haiti/ http://knowledgeproblem.com/2010/01/26/price-gouging-in-hait... in the context of Haiti specifically. WRT vaccines in particular, please read my post as charitably as possible within the surrounding context of the thread -- I can only invest so much time in internet commenting and sometime my grammar isn't perfectly unambiguous. Sorry :-). To help crystallize the point I was making, I edited my parent comment. In general, as long as we're being pedantic, I suppose that "completely unavailable" -- meaning you can't locally buy a vaccine even for infinite money -- is a rather degenerate form of price inflation. And vaccine stores can be ruined by power outages, which are common during natural disasters. Edit: Also, my parent comment states "price inflation for bare essentials [immediately following a disaster]", not "systemic inflation" in the sense of a country or region's entire economy. Cash handouts may very well be an effective mechanism for providing long-term redevelopment aid to an area effected by a natural disaster; in fact, that's essentially what happens with insurance payouts when middle class areas of the US are hit by disasters. But redevelopment is quite different from emergency response, which is what this thread is about.
jerf 11y ago
This is Econ 101. What else do you expect a skyrocketing demand meeting a just-destroyed and rapidly plummeting supply to do? I think the onus is on you to somehow demonstrate that the price of goods would not be affected by such a blindingly obvious combination of supply and demand changes. I have no idea where you think this "evidence" is coming from that somehow in a disaster prices don't rise. If they don't, it would only because the entire market has been destroyed and "prices" don't even apply anymore.
modoc 11y ago
New England during a bad winter... During the bad ice storms a few years ago that left many areas, including mine, without power for a week+, things like generators, kerosene lamps and heaters, etc.. ranged from several times more expensive than usual to unavailable. During this past winter when ice dams were a massive issue in MA, national chain hardware stores were trucking in roof rakes and selling them for $150+ (normal prices of around $25-30).