Texas price gouging law is backfiring

Knowledge Problem

Halea Walker and I have an op-ed appearing in the Dallas Morning News explaining that Texas’s anti-price gouging law comes with some unintended consequences.

What I most want to say about price gouging laws is, in effect, “if you mess with price discovery, you’re going to have a bad time.” Unfortunately, that claim does not resonate deeply with non-economists.

In the op-ed, we give two examples of ways the state’s enforcement of the law post-Hurricane Harvey is giving Texans “a bad time”: first, the law likely protects hoarders able to stock up fast more than it protects consumers actually distressed by the hurricane; and second, the law ends up disadvantaging small businesses to the benefit of big business.

Here is the first part of the op-ed:

In the aftermath of Hurricane Harvey, a photo of a case of bottled water selling for nearly $43 at a Houston-area Best Buy quickly…

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This entry was posted in applied price theory on by .

About Jim Rose

Utopia - you are standing in it promotes a classical liberal view of the world and champion the mass flourishing of humanity through capitalism and the rule of law. The origin of the blog is explained in the first blog post at https://utopiayouarestandinginit.wordpress.com/2014/03/12/why-call-my-blog-utopia-you-are-standing-in-it/

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