The Economics of Snow in South Hadley

The Economics of Snow in South Hadley

by Lina, Olivia, Yang, and Xinyang

This weekend, the students of MoHo have once again added another “wonderful and memorial” experience to their college slam book. This weekend’s snow storm was like no other. The beautiful MoHo campus was turned upside down. Trees fell on buildings, and made it very scary and unsafe to play outside. The aftermath of the storm left students really excited because we now had “36” hours in a day to finally catch up on classes that were becoming overwhelming.  The only thing that would have made it better would have been some hot chocolate and s’mores around a fireplace!

However, hot chocolate was out of the question. We came to realize our dependency on electricity because there are limited substitutes for energy. Consequently, as consumers of electricity, our demand is inelastic. The power outage brought all activities on the campus to a standstill. Lina and her friends decided to go to Big Y to buy some groceries. Although the shop was opened, they were accepting only cash. Electronic transactions could not be processed. They decided to come back to school to use the ATM in Blanchard, but guess what? The ATM also operates on ELECTRICITY! For an absurd second, they honestly thought the ATM ran on anything other than electricity. It was a reality check!

Previously we thought the cost of a snow storm was only the money spent on buying salt and equipment to clean up, but it actually involves a lot more. Dairy products in the dining halls and Big Y had to be thrown away because of the power shortage. This turned out to be a large waste of money because they spent money to purchase these products, but didn’t  receive any revenue let alone profits.

It was also very surprising that almost all MoHo students were craving for food from Main Moon, but guess what? Main Moon also went on a “break” during the storm. This would have been the perfect time for Main Moon and other stores to make more money since most students soon grew tired of the Blanchard sandwiches we were fed. With this new demand for groceries and food created by the storm, Big Y and Main Moon could have increased the prices of their commodities.  Students and other locals would have paid the higher prices because their demand would have been inelastic.

This got us thinking. If there were a power outage in all of America, it would be a major disaster because we are connected to the world through the help of electricity and Internet. Businesses would lose a lot of money because the storm would reduce their ability to preserve their products. Businesses also might lose money from necessary cleanup efforts.  They would also suffer losses from the halt in business as a result of not being able to process transactions and run daily operations. Therefore, it would be more profitable and efficient for companies to become self-reliant or find alternative sources of energy.  They might be able to avoid what happened in the little town of South Hadley on a much larger scale.