Chapel Hill Review

A top North Carolina economy expert says Gov. Roy Cooper should repeal price gouging laws. Economist Jon Sanders says the present laws are increasing retail shortages during the coronavirus crisis.

Jon Sanders, who is the present director of regulatory studies at the John Locke Foundation, told reporters on March 23 that the increasing prices due to price gouging could actually slow down retail shortages.  

Sanders is asking Cooper to change the anti-gouging protections that were added to Cooper’s emergency declaration announced on March 10.

Sanders also says that price is valuable information. He uses toilet paper as an example. He says that the price of the toilet paper tells retailers and suppliers how much the consumer wants it.

“Price is information," Sanders told The Center Square. "It gives consumers how much an idea of how much something's in demand. How much people want it, like toilet paper right now. And also gives suppliers, or potential suppliers, how much toilet paper is needed right now.”

However, Attorney General Josh Stein says it is illegal to charge people more during a crisis. He urged residents to inform his office if they see a business overcharging during the coronavirus crisis.

“It is illegal to charge excessive prices during a state of emergency,” Stein said in a March 10 statement. “If you see businesses taking advantage of this crisis, let my office know, and we will work to hold them accountable.”

Sanders said the rising prices make people stop and think. Oftentimes the rising prices will detour people from buying more than they actually need. Often, the consumer will only buy what they need to get by.

“Allowing the price to adjust to this demand makes the price go higher, makes us think twice, ‘Well, do I really need three weeks' supply of toilet paper? Maybe I can get by with two weeks,’ ” Sanders said.