On pricing and altruism
The aftermath of the Christchurch earthquake has seen much of New Zealand pulling together to help out affected residents who are in need. It has also seen a scarcity of many essential items as supermarkets close and water is switched off. In particular, queues at petrol stations have been huge and that has prompted Eric Crampton — a Christchurch resident himself — to call for higher petrol prices. He is concerned that people with the greatest need for fuel will not get it if there is a shortage. Rather, the people most able to queue for a long time will get the limited amount of petrol and those may simply be the people with the least pressing need to be elsewhere. In summary, he is worried that the petrol will unfairly go to those who may not have the greatest need of it.
In reply, Keith Ng’s attack on economists mischaracterises the discipline and then erroneously attempts to refute Eric’s argument. Read more