That Mysterious, Unavailable "Correct" Price

This quote from a hotel owner in Venezuela that now asks its patrons to bring their own toilet paper caught my eye:

Camacho says she refuses to buy toilet paper from the black market on principle.

“In the black market you have to pay 110 bolivares [$0.50] for a roll of toilet paper that usually costs 17 bolivares [$ 0.08] in the supermarket,” Camacho told Fusion. “We don’t want to participate in the corruption of the black market, and I don’t have four hours a day to line up for toilet paper” at a supermarket….

I see this all the time, the notion there is somehow a "correct" price that no one is willing to charge.   There is nothing real about the 17 bolivares price.  It is a fiction.  There are only two real prices in the market -- 110 bolivares PLUS any risk/penalty from breaking the law or 17 bolivares PLUS 4 hours of your personal time.  My sense is that if the legal risk of buying on the black market is low, and you knew the average order size and the value people placed on their own time, you would find these two prices converging.  But in any case, it is dumb to continue to insist that 17 bolivares is the "right" price.


  1. Vypuero:

    Venezuela drank the kool-aid and now they are in the process of dying

  2. Dan Wendlick:

    What it looks like is happening is that the governement has lost the ability to prop up its own currency. Right now the government seems to value the bolivar as 1/17th of a roll of toilet paper, but the market values it as 1/110th of one.It looks like the government has in effect mortgaged off all of their gold, forign cuerrncy reserves, and now exportable oil for the foreseeable future. The one bright spot is that soon they will have a ready source of toilet paper, in the form of all of those 1000 bolivar notes floating around the country.
    Last years forced sales of electronics and appliances at government prices seems to me to be a way for the Chavista loyalists to have been able to convert their cash into hard goods before the coming currency devaluation. It's looking like that time of reckoning has begun.

  3. Me too:

    Funny how capitalism always springs up when you try to kill it. It's our natural way of doing business.

  4. Ponklemoose:

    If we make some assumptions about the quantity and volume of TP on a roll of Venezuelan TP, it may be that the black market price is constrained by the third option of just using 110 one bolivar notes.

  5. Ponklemoose:

    In retrospect that should have been 110+N one Bolivar notes.

  6. bigmaq1980:

    Very sadly true.

    On the one hand it is amazing that people hold onto these beliefs when the evidence is as stark as it is (this guy won't even stand in line for his "real" price, so he obviously knows there is a "cost" to it).

    On the other hand, frequently run into people who refuse to drive on toll roads ($0.18/mile) and rather endure a longer commute, since they already "pay their gas tax" and roads should be "free". Seems like the same kind of thought process is involved.

  7. bloke in france:

    Room rate set by chavista fiat? So it's profitable to book in so that you can steal a toilet roll?