Learning to Hoard: The Effects of Preexisting and Surprise Price-Gouging Regulation During the COVID-19 Pandemic.

ABSTRACT: Theory suggests anticipation of shortages stemming from price regulation can motivate households to stock up more and thereby aggravate the regulation-induced shortage. We test this theory on online shopping searches for two typically store-bought staples: hand sanitizer and toilet paper. Combining (i) interstate variation in type of price-gouging regulation-preexisting versus surprise versus none, (ii) their temporally staggered implementation, and (iii) the demand surges for hand sanitizer and toilet paper during the COVID-19 pandemic facilitates identifying the impacts of different price-gouging regulation on consumer searches. Our results are consistent with price-gouging regulation-driven anticipatory hoarding. Difference-in-differences estimates reveal that states with preexisting-re

SUBMITTER: Chakraborti R 

PROVIDER: S-EPMC8325989 | biostudies-literature | 2021

REPOSITORIES: biostudies-literature