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MoreGaghPlease t1_j84t548 wrote

Reply to comment by ottomaticg in Love of rare liquor lands Oregon officials in criminal probe by Caratteraccio

This is exactly what economists would expect to happen when a price ceiling is set below equilibrium price. The government said ‘you can’t sell above X’ and so supply dropped significantly and third-parties sought to arbitrage at the equilibrium price. It results in a loss of total surplus, and a wealth transfer from sellers to third parties (and a wealth transfer from sellers to some small subset of consumers unaffected by the arbitrage). Or in simple terms: the public didn’t get to buy as much of this stuff as it otherwise would have, and third parties were able to skim part of the profits of what they did buy.

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MyWALife t1_j854uz7 wrote

> the public didn’t get to buy as much of this stuff as it otherwise would have,

That may have been the original intent.

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MoreGaghPlease t1_j85i5yk wrote

The price ceilings they have are way above the price of 'bottom shelf' liquor. So as a policy objective, much of what it does is likely just redirect consumers to less expensive spirits.

If the goal was to limit overall alcohol consumption, they'd more likely do it with a price floor than a price ceiling (i.e., you must price above $X)

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photofluid t1_j88i7eh wrote

High prices can hurt brand value.

Also, wealth transfer can be fair, via a lottery system for example.

Lastly, not all supply bottlenecks can be solved by higher prices.

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Send-More-Coffee t1_j8739dg wrote

Counterpoint: I want to be able to buy booze that has a reasonable markup compared to its production/shipping costs. Not all products need to counter their scarcity by finding equilibrium, their scarcity can simply result in hype. Economics doesn't have morals, and makes poor policy as a result.

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