Applied Utilitarianism: The Price of Oranges in Berkeley

The big frost that devastated the California citrus crop was two weeks ago, yet prices did not jump immediately. Only recently have the prices of boxes of small EZ-peel oranges at Trader Joe's risen, from $4.99 to $7.99 a box.

This tells us that such oranges are not storable--if they were, Trader Joe's would have kept them in the back until now, and so made an extra $3 a box. This also tells us that the memory of eating oranges is not storable either--it it were, consumers would have gorged themselves on oranges as soon as they realized they were going to be scarce this winter, and so saved themselves an extra $3 a box.

What other goods can you think of that are "nondurable," in the sense of neither being storable by producers or sufficiently memorable to consumers? What goods are "durable" in either of these senses.

Comments

[demisod]

At least from the consumer's viewpoint, doesn't some of it depend on how significant a purchase is the item? I may try to mentally keep up with the market price for something if it is a costly purchase for me. I have deferred purchasing some consumer electronics because I thought their price would drop. Steak has gotten expensive enough that I might stock up at a favorable price. OTOH, I don't drink sodas much and their price doesn't matter a great deal to me, so long as it is cheap. A 30 or 40 percent swing in their price is not going to influence my behavior much. I suppose you could say that goods that are impulse purchases would exhibit this behavior. And lots of our purchases are impulse purchases. It's a little harder to explain the merchant's behavior, since presumably he has more incentive to track the price of the goods he sells. But again, if profit margins are low on a item, if it's not a significant part of his business, how much attention will be pay to the price of his oranges?

[Matt]

A box of "small, E-Z peel oranges"? Do you mean clementines? (That's the only kind of oranges in a box trader joes sells out here in pennsylvania, at least). If so, they mostly come from spain so things in CA wouldn't matter to them, at least not much. They are also mostly a seasonal item, now going out of season. But maybe you mean something else.

[Gene O'Grady]

Avacados? Bananas?

[moloch-agonistes]

Lust, obviously. Love is arguably durable, but I have my doubts.

[pgl]

Trader Joe's acting like a for profit entity taking advantage of high prices? I'm shocked. And I just purchased a case of Two Buck Chuck (Charles Shaw wine for $2 a bottle) from them. Thanks Brad - as your post on the high price of citrus fruit made my day!

[c gilbert]

Didn't think there was a Trader Joe's in Berkeley. They're trying...

[Tadhgin]

Electricity, the ultimate non durable good, and (in most circumstances) non memorable

[Barry]

Or, Brad, that Trader Joe's is not raising the price as they could, because they want people to keep coming back, due to the good deals to be found there.
They'll look for another fruit that's available to replace the oranges/clementines, as that supply fails.

[Ben Hyde]

Experience doesn't have an exponential discount rate, but a hyperbolic one. That miss match between the individual consumer's preference machine and that of the corporation runs deep and this is just a tiny example.

Let's see ... an analogous example ... Did you visit Mt. Kilimanjaro before the snows melted?

[Larry]

Actually, navel oranges will keep pretty well for a week or so in the fruit drawer of your fridge. Contrary to Brad's thesis, since I like oranges so much, I bought more of them starting a couple weeks ago, and have been eating more since, awaiting the time when they'd get to be too expensive to buy. My stash is almost gone now, but it's true that it won't keep much longer.

[Emboldenerist]

Chas Shaw's best has been $3+ here on the right coast for a number of years now. Is it really still $2 in CA?

[Nathan Myers]

Medical care, surely?

[JimVA]

Surely oranges are storable enough that if we didn't have trade restrictions keeping them out, we would consume cheap, delicious oranges from Brazil rather than vulnerable, freezable oranges from California and Florida?

[Per Kurowski]

If consumers had really hoarded oranges at $4.99 (which some of them might have done) then who is to tell us that Trader Joe would not have been charging $9.99 now... in another chapter of the never-ending cat and mouse game between consumers and vendors.

Or was the two weeks it took for the price adjustment the time requiered to convince orange growers that they should no get much more for their oranges?