EconTalk Michael Munger on Price Gouging
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Jan 8, 2007 
Michael Munger, Duke professor of economics and political science, shares firsthand hurricane stories and how markets reacted. He recounts power loss, surging demand for ice and generators, and the controversial $12-a-bag sellers. The conversation focuses on anti-gouging laws, how price signals mobilize supply, and why higher pay can attract needed goods and labor after disasters.
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Hurricane Fran Left Raleigh Isolated And Helpless
- Michael Munger describes being in Raleigh when Hurricane Fran knocked down 36 pine trees and cut power across the city, leaving residents isolated and scrambling for basic supplies.
- He recounts chainsaws, blocked roads, tarping roofs, and the disorienting breakdown of everyday services that turned niceties into urgent necessities.
Ice Shortage Was A Distribution Problem Not A Production Problem
- Loss of electricity created urgent demand for ice to preserve insulin, formula, and food across a 600,000-person metro area.
- Michael Munger notes ice is trivial to produce elsewhere, so the problem was getting it into the city, not creating it.
Anti Gouging Laws Discourage Critical Supply Inflows
- Anti-gouging laws with vague terms like "unreasonably excessive" deter suppliers from transporting scarce goods into disaster zones.
- North Carolina's statute threatened fines up to $5,000, incentivizing sellers to keep scarce ice in unaffected towns.