Bryan Caplan  

Price Controls on Gas: Is the Public Getting What It Wants?

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According to a new Gallup survey, 53% of Americans want price controls on gas. So it looks like the democratic process is failing to deliver the policies the public wants.

But wait: 79% of the public opposes gas rationing. Since rationing is an almost automatic consequence of price controls, can we really say that the public favor price controls after all?

Perhaps more importantly, once you know both of these facts, it's easy to see why politicians are reluctant to impose price controls. The public may not see the connection between controls and rationing, but most professional politicians probably do (or at least they have advisors to point it out). This means that politicians at least have to wonder: "Won't the public blame me when the controls they want lead to the rationing they oppose?" It's no guarantee that controls won't come, but it does apply a brake.

P.S. Notice: What is arguably the biggest reason for the increase in U.S. gas prices - the fall of the dollar - comes in dead last on the public's list of explanations. "Gouging," unsurprisingly, remains at #1. Oy gewalt!

HT: Alex Tabarrok

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COMMENTS (7 to date)
Jeppen writes:

Well, the public isn't very well informed, it seems. But professionals don't seem to be either... Lots of truckers in Europe, mainly Spain and Great Britain, are on strike because of higher fuel prices and they want the governments to guarantee hauling rates. Farmers and fishermen are also complaining. I have a hard time understanding this. They should all be used to fluctuating prices on the goods they use in their businesses, and should see the obvious solution: increase their rates themselves!

aaron writes:

I still think what is driving high gas prices (other than the weak dollar) is giffen behavior and people acting on bad information (misconceptions of what is efficient).

There were many good comments on recent posts by Tyler Cowen and at Freakonomics Blog. (here and here)

John Fast writes:

1. These poll results look to me like a perfect example of the Mueller Effect. Do you agree?

2. How quickly does the political system need to give the public what it wants ("good and hard" as Mencken put it) in order for us to believe that it works (at least in that sense)?

Or, if you prefer, how long a time-lag would it take before we can declare that the public is not getting what it wants?

My SWAG would be 1.5 election cycles -- IOW three years in the United States. So I'd like to know how long a majority of the public has favored price controls on gasoline.

3. Going back to the Mueller Effect, as far as I can see the only way to have price controls without rationing is if people support a rule of first possession -- i.e., people who are at the head of the line can have as much gas as they want.

quadrupole writes:

Right of first possession just leads to accounting tricks... basically, your position in line becomes a tradable commodity (directly or indirectly)... *poof* you've just moved money from the hands of people who provide gasoline to the hands of people who spend time idling in line... how efficient...

Jason Briggeman writes:

You could stretch it like this with any policy. For example, maybe the public wouldn't want (enjoy?) the unintended consequences from having withdrawn from Iraq (which, as I pointed out 19 months ago, would have been done by now if politicians gave the public what they plainly want) -- but does that prepare us to claim that (A) the public doesn't really know the consequences of withdrawal, (B) the politicians do (when they didn't know the consequences of invasion?!), and that thus (C) the people are getting what they want even though the troops remain in Iraq? (If that's the case, couldn't we just skip the survey research from now on and just ask politicians what the people really want?)

Isn't the simple truth that a majority wants price controls, a majority doesn't want rationing, a majority wants out of Iraq, a majority wants to win in Iraq, and a majority wants free ice cream? The notion that the majority-favored positions are (or could be) consistent was debunked loooong ago. Let's not make Ken Arrow come back and prove his theorem again...

Indregard writes:

Perhaps they just don't mind queues?

Fazal Majid writes:

Oil prices have been rising in euros as well. The primary driver for the rise in oil prices is rising demand in Asia, the dollar's fall is just an accelerator.

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