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Price Gauging or Market Forces? Fairness Perceptions of Price Hikes during the Pandemic

Author

Listed:
  • Avichai Snir

    (Bar-Ilan University)

  • Daniel Levy

    (Bar-Ilan University, Emory University, ICEA, ISET at TSU, and RCEA)

  • Dudi Levy

    (Bar-Ilan University)

  • Haipeng Allan Chen

    (University of Iowa)

Abstract

We report the results of surveys we conducted in the US and Israel in 2020, a time when many prices increased following the spread of the COVID-19 pandemic. To assess respondents' fairness perceptions of price increases, we focus on goods whose prices have increased during the pandemic, including some essential goods. Consistent with the principle of dual entitlement, we find that respondents perceive price increases as more fair if they are due to cost shocks than if they are due to demand shocks. However, we also find large differences across the two populations, as well as across goods.

Suggested Citation

  • Avichai Snir & Daniel Levy & Dudi Levy & Haipeng Allan Chen, 2024. "Price Gauging or Market Forces? Fairness Perceptions of Price Hikes during the Pandemic," Economics Bulletin, AccessEcon, vol. 44(4), pages 1291-1325.
    • Handle: RePEc:ebl:ecbull:eb-24-00103
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Dual Entitlement; Fairness Perceptions; Consumer Antagonism; COVID-19; Pandemic; Price Level; Price Adjustment; Price Increase; Price Rigidity; Sticky Prices;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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