Anti-Gouging Laws, Shortages, and COVID-19: Insights from Consumer Searches

Existing anti-gouging laws in several US states prohibit large price increases in the wake of emergencies Statewide emergency declarations following the COVID-19 pandemic's rapid onset activated these laws, creating a natural experiment that we exploit We compare the changes in search behavior before and after activation across states with and without these laws using data from Google Shopping Trends during the early stages of the pandemic We focus on hand sanitizer and toilet paper, two staples predominantly bought in stores in regular times that experienced substantial in-store shortages during the pandemic We find robust evidence that antigouging laws increased searches for hand sanitizer, and some evidence of similar impacts on toilet paper These results corroborate predictions regarding the shortage-inducing or -aggravating tendencies of anti-gouging laws, and they inform the ongoing public debate on anti-gouging laws and their potential effects during public health emergencies like COVID-19