tag:blogger.com,1999:blog-2830084253401570472.post4421315244665569068..comments2024-03-28T09:22:36.967+13:00Comments on Offsetting Behaviour: Double petrol prices. Do it now.Eric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-2830084253401570472.post-24029577805391296792011-02-26T06:14:59.624+13:002011-02-26T06:14:59.624+13:00The idea of having the money go to relief is very ...The idea of having the money go to relief is very clever. This could actually work, and if it was arranged to give it enough publicity the message "Don't buy more gas than you need" could get out more easily.Wonks Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-67096500919065129392011-02-26T00:50:35.909+13:002011-02-26T00:50:35.909+13:00Eric, here is a link to cheer you up. Fuel for ano...Eric, here is a link to cheer you up. Fuel for another fight (maybe a winnable one). Check this new paper doi: 10.1136/bmj.d671<br />Made it to the Beeb. <br /><br />Take care<br /><br />"..and that is why economists stand alone at parties Russ" - Mike Munger to Russ RobertsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-7186971599432161932011-02-25T23:55:02.291+13:002011-02-25T23:55:02.291+13:00@Luis: How many other things can you afford to pay...@Luis: How many other things can you afford to pay many times the price, but choose not to because the price seems too high? The insurance is mostly of value because everyone expects that the stations will be empty. Break the expectation, and folks don't need the insurance so much.Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-31982223803159835492011-02-25T22:56:02.907+13:002011-02-25T22:56:02.907+13:00@Eric I could have afforded to pay many times the ...@Eric I could have afforded to pay many times the price of petrol and I only drive a crummy car: it is only a small price to pay for the insurance. In addition, as a libertarian would you trust the government if you heard that the price hike was *only for a couple of days*?Luishttp://apiolaza.netnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-30422448655549456052011-02-25T21:23:36.861+13:002011-02-25T21:23:36.861+13:00You are absolutely right, the absurdity of seeing ...You are absolutely right, the absurdity of seeing people waiting in huge lines, (with engine idling I might add) to get fuel shoots the rational 'homoeconomicus' back to the stone age. <br />Where the hell are they all planning to drive to? Probably only up the road and back again.<br /><br />I also think a designated trucks only route should be implemented so haulage trucks/equipment can get some sort of priority. In this environment the heavy machinery should be valued over the civilian vehicle.<br /><br />Classic feedback loops in action.Vnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-21226107028520420702011-02-25T20:40:24.440+13:002011-02-25T20:40:24.440+13:00@Duncan: What's stopping them is that any that...@Duncan: What's stopping them is that any that tries it will be pilloried by the likes of the commentators at Hickey's blog, unless they do it in concert and with the surcharge going to earthquake relief. People will drive across town if they hear gas is a couple cents cheaper in normal times; you don't think that folks with a decent amount in the tank or without pressing needs wouldn't wait a couple days for the price to be cut in half? Seriously?<br /><br />@Luis: Overall demand elasticity isn't set by the Jaguar guy. There aren't that many of him. <br /><br />@Keith: Appeals to sense of public duty have been tried and have failed. Queues persist. Two days of price hike 'till they can run tanker trucks through Lyttelton Tunnel again from the port. That's it.Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-6236185381517070612011-02-25T18:42:04.651+13:002011-02-25T18:42:04.651+13:00Also, I think the authorities are doing the right ...Also, I think the authorities are doing the right thing: Appealing to people's sense of public duty to get them to not horde and stay off the roads when possible, and to reassure them that supply will normalise soon.Keith Nghttp://www.publicaddress.net/onpointnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-51698013732105176192011-02-25T18:39:43.348+13:002011-02-25T18:39:43.348+13:00I think thinking about this in terms of shifting c...I think thinking about this in terms of shifting consumption is fundamentally wrong. The demand that we're trying to reduce is from horders. They are hording because of a lack of confidence that supply will resume soon and uncertainty about demands (e.g. "Will I need this petrol to get myself/my family to safety quickly?").<br /><br />They are buying security. That is not elastic. And future security is not a substitute for present security.<br /><br />If you're able to price enough people out of the market to reduce the queues, that might partially restore confidence in supply, but the exorbitant prices will have the opposite effect - "what if supply doesn't resume and prices go up even more?".Keith Nghttp://www.publicaddress.net/onpointnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-12617508579744861042011-02-25T18:32:24.554+13:002011-02-25T18:32:24.554+13:00I do not think the guy driving the Jaguar with two...I do not think the guy driving the Jaguar with two large additional containers in the boot (that was ahead of me on the queue two days ago) is that price sensitive. It may be better to impose a quota (say no more than 50 L per purchase) for a few days. Anyway, buying fuel now does not seem to be such a big issue in good part of the city.<br /><br />By the way, nice to read that you and your family are doing well.Luishttp://apiolaza.netnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-37061411930985611422011-02-25T17:19:13.673+13:002011-02-25T17:19:13.673+13:00What's stopping petrol stations putting their ...What's stopping petrol stations putting their prices up themselves?<br /><br />I don't think hiking the price will get rid of the queues. More likely the guy with 1/4 of a tank will simply wait to get the 10 litre his $40 now gets. And be pissed off with it.<br /><br />I think people want the mobility and options that petrol gives them. Given what's happened I'd think that people are reprioritising their spending to essentials and probably doubling the pricing would have very little impact on the number of demands, and might not even effect the amount consumed.Duncannoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-9418662947643340872011-02-25T17:00:04.322+13:002011-02-25T17:00:04.322+13:00I had the temerity to suggest this sort of thing o...I had the temerity to suggest this sort of thing on Kiwiblog, and have been called all sorts of names.beautoxnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-54230261031439125962011-02-25T16:25:55.619+13:002011-02-25T16:25:55.619+13:00@Keith: You're telling me a poor person whose ...@Keith: You're telling me a poor person whose roof has fallen down and is trying to get supplies is made worse off by going an extra $20 in debt to get enough gas to get to the hardware store than having to wait an hour for gas? <br /><br />Two days. The hike only has to last long enough for supplies to be back up to normal. That's kinda how it works, right? Folks who can wait 2 days, do so. That's why you're dead wrong about "just reduces the entire market". If everyone knows the price comes down again in two days, it induces a temporal reallocation of consumption.Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-68251043953309589342011-02-25T15:45:42.311+13:002011-02-25T15:45:42.311+13:00Pricing will only reduce the entire market - it wo...Pricing will only reduce the entire market - it wouldn't be targeting the right behaviour. Many people with means are still going to be able to afford to horde, but it would put some people with genuine need in a really bad situation.<br /><br />The benefit of this is far outweighed by the social consequences - if you price-rationed essential resources, you're jeopardising the communal goodwill, and that has consequences way beyond a single resource like petrol.Keith Nghttp://publicaddress.net/onpointnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-91218804107090007112011-02-25T14:37:05.906+13:002011-02-25T14:37:05.906+13:00The key is getting folks with a quarter tank to wa...The key is getting folks with a quarter tank to wait the couple days till supplies are back up. Temporary price hike does that so long as everybody knows it is coming back down again.Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-35062031835490093722011-02-25T13:59:02.413+13:002011-02-25T13:59:02.413+13:00Eric, good to see you up again. It is a hard one t...Eric, good to see you up again. It is a hard one to swallow but this may work. We have no gas here and the station is cleaned out, have biked over a few times to see huge queues every time. Truth is we are OK for the moment but given the huge queues I have to admit that I will be in the queue as soon as that tanker rolls in, just to have the option to leave / travel / find an open shop etc. Doubling the price would make me think twice - but I wouldn't feel happy about it. Take care.Anonymousnoreply@blogger.com