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Sympathy Gouging after a Snow Storm

By: Frank Yunker

Date: 2017-03-23

Snowblower - a sign of preparedness
Snowblower - a sign of preparedness

Let’s say you move to a new neighborhood in upstate New York. A winter storm hits and as you finish snow blowing your driveway, you notice the house across the street. The wife has just returned from work and she’s parked in the street as she tries to shovel the snow bank created by the snow plow. It’s a long, laborious act and none of us is getting any younger. So, what do you do?

Common courtesy and neighborliness suggests you will take a few extra minutes and snow blow your neighbor’s driveway. Time permitting, you will snow blow the whole driveway, but at the very least you will clear the hard-packed barrier left by the snow plow at the foot of the driveway.

What about the next snow fall? Imagine then that both the husband and wife across the street are shoveling the snow. You know them well enough to know they both have full time jobs. They have lived in the house more than a dozen years. What now?

The snow storm isn’t a crisis. Snow storms happen every year in upstate New York. The neighbor’s lack of snow blower is not a crisis. It is a choice. Maybe they cherish the exercise. Maybe they prefer to spend money on other things. It no longer matters. They have known for years that a snowfall will result in back-breaking shoveling and apparently, they are fine with that.

Maybe there is a lot of snow. Do you charge $50? Probably more like $100? If you approach them, you offer $50. If they approach you, suggest $100. If they come screaming that if they can’t get to work on time they will be fired and they really need your services then tell them $200.

Doesn’t sound nice. Sounds greedy and opportunistic. Sounds like you are taking advantage of them.

But wait! Economics is about the seen and the unseen. Aren’t they taking advantage of you? Aren’t they saying they don’t need to be prepared for expected scenarios (never mind unanticipated ones)? Expecting you to charge a reasonable fee when they put unreasonable, need-it-now demands sounds like you are the one being taken advantage.

Remember, price is a signal to the market. If word got out that you were charging $200 per driveway and getting it, what would happen? Enterprising teenagers with Dad’s snow blower would be offering it for $150… and then $100… and then maybe even $50. Or maybe an enterprising young man would drive down the street selling snow blowers that retail for $500 at a price of $800. No one would be forcing the sale, but maybe some of your neighbors would rather give him $800 instead of giving you $200 and still have a problem when the next storm arrives.

It turns out there is a cost to being ill-prepared for reasonably expected scenarios. While upstate New York experiences snow storms, we know Florida will be hit – sooner or later – by a hurricane. In Arizona, the desert sun will get above 100 degrees Fahrenheit for days on end.

What is often called “Price Gouging” on the part of the seller is really “Sympathy Gouging” on the part of the consumer. Being ill prepared for an expected catastrophe is what creates a crisis. Expecting others to treat you as they normally would when conditions are critical is not fair to those who prepared. In addition, to vilify those who anticipated a lack-of-preparation and were willing to step in to help is not neighborly. To portray the helpers as villains while the unprepared sympathy gougers are portrayed as victims is an inaccurate presentation of the news.

You are going to lose power someday. Maybe caused by the wind or a traffic accident. Maybe caused by a fire, a snow storm or a hurricane. Does it really matter why? It’s going to happen. Do you have a generator? Because when the crisis hits, you’re going to want a generator more than sympathy.