Economics gives you a perspective on the world, but it’s a perspective that’s often at odds with public opinion. Long lines and rationing at gas stations are a classic example.
Last week a colleague took a taxi from Newark Airport to the city and had (roughly) the following conversation:
Colleague to taxi driver: How are things? Any trouble getting around after the hurricane?
Driver: No, the roads have been clear. The only trouble is getting gas. I spend a few hours every day waiting in lines at gas stations.
Colleague: Do you think they should raise the price?
Driver: No, that would be wrong.
(Not wanting to walk to the city, the colleague changed topics.)
The point, of course, is that the two things are connected: the lines and the price. Popular opinion is overwhelmingly against letting the price rise, and many states have laws against price “gouging” during emergencies.
To an economist, this simply makes a bad situation worse. If the price rose, you’d likely see both an expansion of supply (how hard is to drive a tanker from Pennsylvania to New Jersey?) and a contraction of demand (some people won’t drive, and those who buy gas at high prices might choose to buy less). Or to be more formal: letting the price equate supply and demand maximizes economic welfare (the “surplus“). But as my colleague decided, sometimes it’s better to be quiet, even when you’re right.