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Hurricanes and Gasoline Price Gouging

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  • Timothy K. M. Beatty
  • Gabriel E. Lade
  • Jay Shimshack

Abstract

Conventional wisdom suggests that gasoline price gouging before and after natural disasters is widespread. To explore this conjecture, we compile data on more than 4.7 million daily station-level retail gasoline prices. We combine these data with information on wholesale rack prices, spot prices, hurricane threats and landfalls, weather, traffic, and power outages. We investigate the effect of hurricanes on retail prices, wholesale prices, retailer margins, fuel price pass-through, and share of stations reporting transactions. We exploit the fact that the exact timing and location of hurricane landfalls is conditionally exogenous for identification. We find no evidence for widespread price gouging. Instead, we document evidence consistent with shortages predicted by theory in the presence of restrictions on price movements.

Suggested Citation

  • Timothy K. M. Beatty & Gabriel E. Lade & Jay Shimshack, 2021. "Hurricanes and Gasoline Price Gouging," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 8(2), pages 347-374.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/712419
    DOI: 10.1086/712419
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    Cited by:

    1. Erwan Gautier & Christoph Grosse Steffen & Magali Marx & Paul Vertier, 2023. "Decomposing the Inflation Response to Weather-Related Disasters," Working papers 935, Banque de France.
    2. Luís Cabral & Lei Xu, 2021. "Seller reputation and price gouging: Evidence from the COVID‐19 pandemic," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 867-879, July.
    3. R. Chakraborti & G. Roberts, 2021. "Learning to Hoard: The Effects of Preexisting and Surprise Price-Gouging Regulation During the COVID-19 Pandemic," Journal of Consumer Policy, Springer, vol. 44(4), pages 507-529, December.

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