Florida has criminalized price-gouging to prevent the rising cost of essential commodities during hurricane season. Though the state had moved to re-open after the Covid 19 pandemic to stimulate its economy, it continued to enforce the price gouging law in the aftermath of the hurricane season.

Many agree that price-gouging is immoral and reprehensible - those who are already struggling should not have to worry about being victimized by businesses in times of extreme hardship. However, further criminalization of price-gouging and harsher enforcement of price regulation most likely won’t help. Rather, it may end up in economic distortions that will worsen the impact of a disaster and negatively impact consumers.

Florida has opened a hotline to receive consumer complaints about price-gouging. There is the provision of “civil penalties of $1,000 for each violation, and up to $25,000 for several violations within a 24-hour period.” The state Attorney General has also warned violators of personal retribution by naming and shaming them. Such steps are meant to protect consumers. However, this is more likely to backfire, obstructing economic activity in the state.

Imposing price-control measures is bad for the market. It threatens the free flow of goods by interfering with market information, which is vital for sellers, suppliers, and buyers to make financial decisions following a natural disaster.

For example, if plywood prices go up a week before a hurricane, it indicates how short the supply is, marking them as scarce commodities. It signals buyers to buy more plywood immediately, sellers to order more, and suppliers to get more into the stores. But if price control is enacted, consumers may not get the gravity of the situation, which endangers people's lives. Suppliers and sellers have no incentive brought by the rise in demand.

History is full of incidents highlighting how anti-gouging laws make business worse. These laws discourage the supply of goods exactly when they are in high demand. This will hurt the general public, who are the ones this policy aims and claims to protect.

A price increase not only improves the supply shortage but also helps to "economize" buyers' behavior. For instance, if the price of toilet paper, as seen during the Covid-19 pandemic, is kept low forcibly, buyers will purchase it in large quantities, though each household does not need that much.

Eventually, the commodity in question will be out of stock, preventing all in the state from getting it and protecting themselves. Contrary to this, higher prices force consumers to buy only the required quantity and keep the commodities available for more consumers. Thus, price gouging, in a way, corrects the market availability by ensuring balanced economic behavior by consumers.

Additionally, stocking issues may lead to a thriving black market, where prices are much more unaffordable and difficult to enforce. The rush to get essential commodities is sure to weigh heavily on consumers’ minds, and when it comes to keeping their families safe, they may resort to extreme tactics. A booming black market is a more dangerous threat to the purchasing power of the people.

Overall, anti-gouging laws lead to a rise in hoarding by both businesses and consumers. Stores may stop selling commodities openly and channel goods into the more profitable black market. If sellers are prevented from raising prices, it discourages the supply and demand economy. On the other hand, it encourages consumers to buy more and keep stock.

This results in store shelves being empty. Store owners, who have a higher quantity of a commodity, may see this as an opportunity to sell scarce goods on the black market at a premium. Similarly, store employees may funnel these goods to the black market through friends and relatives.

Such actions circumvent the anti-gouging measures easily. Also, a shortage in the supply of goods, and their much higher price, is difficult for people already struggling with the aftermath of a hurricane. In thinking of consumers' overall safety and well-being, especially in times of crisis, there must be an abundance of sensitivity and avoidance of over-regulation.