Michael Giberson
A significant water main break affecting over 2 million people in the suburban Boston area has lead the Massachusetts Governor Patrick Duval to declare a state of emergency. A boil water order is also in effect. Subsequently, the Governor directed the state’s Division of Standards “to closely monitor bottled water prices in areas affected by the weekend’s water emergency, including inspecting stores in the region and responding to potential consumer complaints of price gouging.”
Massachusetts Attorney General Martha Coakley said her office “will be sending out inspectors to review reports of price gouging and also conduct spot-checks of local businesses …. If we discover that businesses are engaging in price gouging, we will take appropriate legal action.”
This is odd, because, so far as I can tell* no law in Massachusetts prohibits price gouging on bottled water. The state’s price gouging law only applies to petroleum-related businesses selling petroleum products at an unconscionably high price in limited circumstances. (Text of the state’s price gouging law; see also a state-by-state description of price gouging limits and the discussion of Massachusetts in Cale Davis, “An analysis of the enactment of price gouging laws,” pp. 46-47.)
So my conclusion is that the Governor and the Attorney General are intentionally deceiving retailers about the state’s price gouging law as a kind of underhanded moral suasion intended to deter price increases on bottled water.
ALSO NOTED: The Boston Globe story which includes the AG’s statement (linked above) also details the extensive extra efforts some local water bottling companies are going to in order to increase production and distribution efforts over the weekend.
In related action, just last week residents in Concord, Massachusetts voted to ban all sales of bottled water.
*I am not an attorney nor expert on Massachusetts law, I’m just an economist that studies price gouging. If I’ve overlooked some relevant portion of the state’s price gouging authority, please let me know.
I wonder if her investigation will extend to Fenway Park, the TD Boston Garden, or Gillette Stadium? They get about $4.25 for a 20 ounce bottle of water on a normal day. I won’t be holding my breath on that one.
My wife is going out to visit her sister in Boston today, a trip planned before the water main break. I bought six cases of water (35 bottles, 1/2 liter each) at Costco here in Western Mass. for $3.45 each to take out to their house. I have half a mind to load up the car tomorrow and take cases out to the Riverside stop and put up a sign, “Water, $20 a case.” If I sold five of them, I’d make a tidy profit (and pay for the gas), but I bet the police would tell me I need a permit.
This is wrong in so many ways. First, there’s the extra bottle-police who shoudl be working to get MORE water into the area. Second, there’s that stupid supply and demand thing. Third, there’s the blame shift from bureaucrats and politicians who SHOULD BE FIXING the bloody pipes. Damn.
It’s like the guy who loaded up his truck with generators and sold them to people who needed power at double the price. Good for him and people who recognize a opportunity and cash in on it. The so called victims are happy to pay the premium for the goods. Governments are so jealous and incompetent that they must threaten need providers with retaliation for cutting in on their turf. Tu Ne Cede Malis Sed Contra Audentior Ito.
on a related note, did anyone catch this line in the nytimes coverage?
“Eighty percent of the city’s schools already use bottled water for drinking, and the mayor’s office said bottled water would be available at schools that do not use bottled water.”
http://www.nytimes.com/2010/05/03/us/03boston.html
if true, stat is ridiculous. tap water should be safe to drink (under normal conditions) and schools shouldn’t be wasting their limited budgets on bottled water.
fortunately for me, the people’s republic of cambridge has its own reservoir and distribution system 😉
“ALSO NOTED: The Boston Globe story which includes the AG’s statement (linked above) also details the extensive extra efforts some local water bottling companies are going to in order to increase production and distribution efforts over the weekend.”
However, these extensive extra efforts should not be reflected in increased prices.
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The focus on bottled water seems a bit overblown. I’m not much of a cook, but even I can boil water for a few minutes. Boiling water was all that was needed to be safe, and even that was just precautionary since no tests had shown water quality problems. (The boil water order has been lifted.)
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