dannno
11-16-2012, 06:07 PM
**You can vote for my idea once moderators have approved it at: hxxp: //feedback.weather.com/forums/131819-weather-com/suggestions/3361988-save-lives-educate-twc-staff-about-the-true-econo
So I went to weather.com today and this was on the front page:
http://i50.tinypic.com/263g9qw.jpg
So....
How can we improve weather.com?
->New Idea or Feature
Save Lives: Educate TWC Staff About the True Economics of "Price Gouging" During a Disaster
As you know millions of people rely on your organization for information about weather and sometimes it means the difference between life or death, safety or tragedy.
Today on the front page of TWC website was a picture of gas station prices with the question of whether gas stations were price gouging. Boy, I sure wish they would "price gouge" in Southern California because gas here is far more expensive than what I saw in the picture.
The fact of the matter is that prices on products have untold numbers of stories behind them and by restricting prices with price gouging legislation, governments are actually significantly reducing the supply of goods and services desperately needed during a disaster.
This is very basic economics:
Charging $10/gallon or more for gasoline DOES provide incentive for more individuals to bring gasoline into weather torn areas that may be difficult to get to, have no power or services, etc.
Individuals charging $10/gallon or more for gasoline DOES NOT stop OTHER individuals from bringing in more gasoline to weather torn areas and selling it at normal market levels or even giving it away.
Charging $10/gallon or more for gasoline even with a limited supply WILL ensure that more individuals have access to (lesser amounts) of gasoline because individuals will buy only what they need and will be less likely to HOARD.
The same principle applies to water, sometimes one of the most necessary items one needs in a prolonged disaster. Let's say a store has only 40 (1) gallon jugs of water left that normally sell for $1. Let's pretend that there is anti-price gouging legislation and so the store continues to sell the water for $1/gallon. The first person, Mr. Johnson comes in a buys 10 gallons for his family for $10. The next person, Mr. Smith comes in and buys 20 gallons for $20 because they see that there is very little water left and he is very panicked about the storm. This is called hoarding. Then Mr. Jones comes in and buys the final 10 gallons and the water is gone. At least 5 more people come in to buy water and are told they have none - these people don't get any water.
Now let's say the anti-price gouging legislation was repealed a month before the storm. The store owner sees that water is in short supply and raises the price to $5/gallon. Mr. Johnson comes in and instead of buying 10 gallons for $50, he figures that 5 gallons is probably enough to get him and his family by for a few days. He also remembers an empty jug in his basement that he is going to fill with tap water so he can fill up the empty jugs once they are gone. The next 7 people who come in the store buy an average of 5 gallons each and EVERYBODY gets water!!
Instead of profiting about $20 on the sale of 40 gallons of water, the store owner just profited $200. He calls up an independent water distributor and tells them he will buy gallon bottles at $2/gallon instead of the normal $.50/gallon if he can deliver them before or shortly after the storm hits. The store owner uses the $200 profit and buys as much water as he can to fill his store back up, and once stocked back up sells the water at $3/gallon for a $1 profit. The water lasts and everybody has plenty of water for the storm. You see, when the supply begins to get replenished with the extra profits, the price automatically begins to go back down to normal levels. But with price gouging legislation, the mechanism that increases the supply is completely missing.
So not only does raising prices on necessities like water and gas during a disaster keep people from raiding the store shelves until they are empty so that more of the goods can be distributed to a greater number of people, but it helps motivate people to bring in more of these needed goods and services. And remember, it doesn't stop ANYBODY from bringing in those goods and services at lower prices, or even for free.
So as you can see, understanding this concept could drastically help in saving many lives. The problem is that news organizations love to use price gouging stories to rile up the public which results in legislation that actually hurts people during a disaster. Please, don't do it. Please, DO educate your staff and everybody you can about this important economic concept that doesn't seem to be taught in schools and certainly isn't taught by the media.
So I went to weather.com today and this was on the front page:
http://i50.tinypic.com/263g9qw.jpg
So....
How can we improve weather.com?
->New Idea or Feature
Save Lives: Educate TWC Staff About the True Economics of "Price Gouging" During a Disaster
As you know millions of people rely on your organization for information about weather and sometimes it means the difference between life or death, safety or tragedy.
Today on the front page of TWC website was a picture of gas station prices with the question of whether gas stations were price gouging. Boy, I sure wish they would "price gouge" in Southern California because gas here is far more expensive than what I saw in the picture.
The fact of the matter is that prices on products have untold numbers of stories behind them and by restricting prices with price gouging legislation, governments are actually significantly reducing the supply of goods and services desperately needed during a disaster.
This is very basic economics:
Charging $10/gallon or more for gasoline DOES provide incentive for more individuals to bring gasoline into weather torn areas that may be difficult to get to, have no power or services, etc.
Individuals charging $10/gallon or more for gasoline DOES NOT stop OTHER individuals from bringing in more gasoline to weather torn areas and selling it at normal market levels or even giving it away.
Charging $10/gallon or more for gasoline even with a limited supply WILL ensure that more individuals have access to (lesser amounts) of gasoline because individuals will buy only what they need and will be less likely to HOARD.
The same principle applies to water, sometimes one of the most necessary items one needs in a prolonged disaster. Let's say a store has only 40 (1) gallon jugs of water left that normally sell for $1. Let's pretend that there is anti-price gouging legislation and so the store continues to sell the water for $1/gallon. The first person, Mr. Johnson comes in a buys 10 gallons for his family for $10. The next person, Mr. Smith comes in and buys 20 gallons for $20 because they see that there is very little water left and he is very panicked about the storm. This is called hoarding. Then Mr. Jones comes in and buys the final 10 gallons and the water is gone. At least 5 more people come in to buy water and are told they have none - these people don't get any water.
Now let's say the anti-price gouging legislation was repealed a month before the storm. The store owner sees that water is in short supply and raises the price to $5/gallon. Mr. Johnson comes in and instead of buying 10 gallons for $50, he figures that 5 gallons is probably enough to get him and his family by for a few days. He also remembers an empty jug in his basement that he is going to fill with tap water so he can fill up the empty jugs once they are gone. The next 7 people who come in the store buy an average of 5 gallons each and EVERYBODY gets water!!
Instead of profiting about $20 on the sale of 40 gallons of water, the store owner just profited $200. He calls up an independent water distributor and tells them he will buy gallon bottles at $2/gallon instead of the normal $.50/gallon if he can deliver them before or shortly after the storm hits. The store owner uses the $200 profit and buys as much water as he can to fill his store back up, and once stocked back up sells the water at $3/gallon for a $1 profit. The water lasts and everybody has plenty of water for the storm. You see, when the supply begins to get replenished with the extra profits, the price automatically begins to go back down to normal levels. But with price gouging legislation, the mechanism that increases the supply is completely missing.
So not only does raising prices on necessities like water and gas during a disaster keep people from raiding the store shelves until they are empty so that more of the goods can be distributed to a greater number of people, but it helps motivate people to bring in more of these needed goods and services. And remember, it doesn't stop ANYBODY from bringing in those goods and services at lower prices, or even for free.
So as you can see, understanding this concept could drastically help in saving many lives. The problem is that news organizations love to use price gouging stories to rile up the public which results in legislation that actually hurts people during a disaster. Please, don't do it. Please, DO educate your staff and everybody you can about this important economic concept that doesn't seem to be taught in schools and certainly isn't taught by the media.