Saturday, November 10, 2012

Unintended Consequences - NJ Style

Anti-gouging and license plate edition. During the hurricane New Jersey and New York reiterated that the state governments would prosecute for gas price increases according to anti-gouging laws. New Jersey implemented last week, and New York is implementing this week, every other day fuel purchasing for cars depending on the last number on the plate. These have had some interesting unintended consequences.

First, fuel demand increased because of home generator use. Second, supply decreased because of fuel shortages and gas stations did not have power. Here are the results of the states' response.

1) Anti-gouging laws. a) The price of utilizing a fuel tanker increased dramatically during the hurricane. This was partly due to truck displacement and damage and partly due to demand. This caused the cost of getting fuel to any given location to increase. However, gas station were not allowed to increase prices. Station owners were not motivated to get creative in order to get fuel to their location. Gas stations were running out of fuel, but Hertz wasn't. The reason was that Hertz was willing to pay, even if it meant the truck was traveling 500+ miles to get there. b) Many gas stations had fuel, but no electricity. In theory they could have run on generators in order to pump the fuel. Once again, however, that's expensive. Anti-gouging laws cause suppliers to take their sweet time to work toward ending the shortage. This is what happened here. Long lines didn't end until demand dropped to more normal levels.

2) Purchase restrictions. Besides being inconvenient, it causes people, on average, to fill up a car 1/2 day earlier than they would otherwise (maybe more due to psychological effects and uncertainty of consumption). Because people fill up cars with a fuller tank, they are filling up more often. Because people are filling up more often lines are longer than they would be otherwise... which is the opposite intended effect of the executive order.

Thursday, November 8, 2012

Life Imitates Eek the Cat

In one of my favorite episodes of Eek the Cat, one of the characters, trying to demonstrate his knowledge of history, says, "Pirates lived so long ago, they watched TV by candlelight."

I couldn't help but think of that hilarious Eek the Cat episode when I read this supposedly unintended comedic line from the New York Times:
"Along with eight million others, the Kristofs have lost power, so I’ve been sending Twitter messages on my iPhone by candlelight"

Eek wins.

Friday, November 2, 2012

Warm Welcomes

In Brazil, people welcome you into the fold by inviting themselves over to your home in large numbers, bringing a lot of food. I think Ashley felt a little bit like Justin Long in this clip: