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What Are the Causes of Scarcity?

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  • Written By: Ken Black
  • Edited By: Andrew Jones
  • Last Modified Date: 28 June 2014
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The causes of scarcity can be due to a number of different reasons, but there are four primary ones. Poor distribution of resources, personal perspective on resources, a rapid increase in demand, and a rapid decrease in supply are all potential scarcity causes. The key is to determine what the causes are so that the situation can be corrected. In some cases, more than one cause may be causing a shortage of some things.

One of the main causes of scarcity is poor distribution of resources. Often, the resources are available to meet the needs of a certain population, but the problem is that they have no way of getting to the people. This may be because of war, political paybacks, or other such strife created intentionally by other human beings, usually as a way to assert authority. In some cases, humanitarian efforts can help to relieve these situations, but that might not always be possible. Even if humanitarian efforts help, it may not be enough to reach all the people in need.

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Another one of the common causes of scarcity is when demand increases rapidly, and supply cannot keep up with that demand. For example, this is commonly seen when some locations prepare for a hurricane, and there is a run on supplies such as plywood and generators. While this scarcity does not typically last a long period of time, it does demonstrate how a rapid increase in demand can cause a situation to develop. Further exacerbating this problem is the reduced ability to get supplies to affected areas, which relates to distribution.

Somewhat related to increases in demand is a decrease in supply. Decreases in supply can happen, however, without an increase in demand. Rapid supply decreases could be due to natural disasters, such as droughts and fire. In these cases, the situation may only last as long as a season or a year, but that may cause a considerable amount of stress for those needing the resources.

In some cases, the causes of scarcity could be identified simply as those of personal perspectives. In other words, there may not be any shortage of goods and services at all. Rather, the problem may be that someone simply thinks there is a shortage and therefore, either tries to conserve more, or does not bother to find the resource. This might not be a common situation, but can be just as serious for those who have the perspective of scarcity.

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KoiwiGal
Post 3

Distribution of resources is one of the more difficult issues in the modern world. People are used to having such a wide variety of goods in every supermarket, but that requires such a damaging distribution system (because it causes pollution).

And yet, on the other hand, some say there is enough food in the world to feed everyone, it's just too expensive to ship it to the poor countries.

croydon
Post 2

@pleonasm - Yeah, the same sort of thing happened in New Zealand after the Christchurch earthquake. It damaged the only factory in the world that made Marmite, which is a spread that mostly only New Zealanders eat.

Once news of the factory being down went out, there was a mad scramble to get the last jars. They called it "Marmageddon." I heard of boxes of jars going for thousands of dollars. Which is ridiculous, really, because the factory was only damaged, not gone forever. People tend to get a little bit nuts when they hear that something they like isn't going to be around for a while.

pleonasm
Post 1

You can create a scarcity out of thin air as well. I was reading a trivia site the other day and it mentioned one incident like this in history. Apparently Johnny Carson made a joke on TV about how the States was running out of toilet paper. It was referring to a different situation and had nothing to do with the actual supplies of toilet paper.

But people thought it was a real problem and so they ran out to the supermarkets and stocked up on toilet paper. Which, of course, meant demand skyrocketed and caused an actual shortage of toilet paper, since they couldn't deliver it fast enough to keep it on the shelves.

I don't even want to say that people can be idiots, because really, they had no way to check whether it was pure humor or a cynical comment on something that was actually happening. And it happened!

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