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Price Gouging or Market Forces? Fairness Perceptions of Price Hikes in the Pandemic

Author

Listed:
  • Avichai Snir

    (Department of Economics, Bar-Ilan University, Israel)

  • Daniel Levy

    (Department of Economics, Bar-Ilan University, Israel; Department of Economics, Emory University, USA; ICEA; ISET, TSU; Rimini Centre for Economic Analysis)

  • Dudi Levy

    (Department of Economics, Bar-Ilan University, Israel)

  • Haipeng Allan Chen

    (Tippie College of Business, University of Iowa, USA)

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’ 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 acceptable 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 Gouging or Market Forces? Fairness Perceptions of Price Hikes in the Pandemic," Working Paper series 24-03, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:24-03
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    Keywords

    Fairness Perceptions; Price Increases; The Pandemic; Dual Entitlement; Consumer Antagonism;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E70 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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