Public anger over price gouging is justified – but it could be damaging

The market fundamentalists are not entirely wrong to warn against the popular urge to stamp out price fluctuations, writes Ben Chu

Prices and price changes are information and if you interfere with the flow of information you’re going to get inefficiency (Getty Images )

In 1986 the behavioural economists Daniel Kahneman, Jack Knetsch and Richard Thaler published a classic study showing that in a hypothetical snow storm a large majority of people would think it unfair for a hypothetical hardware store to raise the price of a hypothetical snow shovel.

Ordinary people don’t like price gouging, was the finding.

We don’t need hypotheticals to tell us that in the grim age of coronavirus, or more specifically Covid-19.