A leak in the Colonial Pipeline in Alabama in September reduced the flow of gasoline to Georgia and the Carolinas. In a Charlotte Observer op-ed, Economics Professor Matthew Lewis argues that price-gouging laws make a bad situation worse. The threat and history of legal action by state AGs exacerbates the problem, in part by inducing panic buying due to fears of a shortage that is made worse by these laws. Allowing prices to rise during these emergencies addresses demand-side actions of consumers which are major factors in shortages. Lewis argues that “more sensible legislation on pricing during emergency events is needed.
Anti-price gouging laws are counterproductive, argues @ClemsonEcon Professor Matt Lewishttps://t.co/3ASyo1IJif@clemsonbusiness
— Clemson Economics (@ClemsonEcon) October 3, 2016
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