Joan Costa-i-Font of LSE thinks having a minimum price for alcohol (albeit at higher levels) will help lower alcohol consumption.
This is surprising given most of the time such bans fail. Companies/people always have ways to work around the ban.
Archive for June 30th, 2014
Should we have minimum prices for alcohol?
June 30, 2014Retail onion prices soar to double of wholesale rates…what else was govt expecting?
June 30, 2014Ever since BJP lost elections in the past due to rise in onion prices, onion prices remain a sensitive topic. I mean atleast some price leads to govt attention towards spiraling inflation.
So, once again there are fears over onion prices. Due to really low rain, prices have started rising. And how does govt, respond? Usual stuff, check hoarding. It took some measures recently asking stats govts to check hoarding etc. And guess what? Prices have continued to rise. Is anyone surprised really except for the government?
Actually the expectations of a price surge has already set in. People know rains have been really poor and given our track record even in bounty rains, there is every chance prices will rise. Just this weekend at a dinner conversation, people were saying time to hoard onions as prices expected to shoot if it does not rain in next 2 weeks! So why just blame the agri hoarder when normal people reacting similarly.
So all these bans state the obvious and reactions should be well-known. The prices will soon reach as per expectations. I mean this is bread and butter common-sense thinking and does not even need a study of economics.
A much better strategy is to ensure enough supplies hit the markets regularly. Why will a trader hoard when supplies are good enough? I mean veg prices declined significantly in Jan-2014 when huge supplies hit the markets. One saw a vegetable seller in all nooks and corner so much was the supply. Now as supply has dried up, prices have followed in the opposite direction.
Given the govt’s abysmal track-record on handling food inflation, people have clearly become smarter. They are reacting accordingly. No surprises here really.
Mostly Economics 
