IESET.
Hypotheses·fiscal·price_controls_shortage_effect

Statutory price ceilings set below plausible market-clearing prices produce measurable shortage indicators — stockouts, queue formation, black-market emergence, quality degradation, and in monetary- expansion contexts, large divergences between official and parallel- market prices.

The canonical cases examined are Venezuela 2003-2023 (sustained price controls under Chavismo), Argentina under the Kirchner-Fernandez governments (Precios Cuidados 2014-2023), USSR late Brezhnev / Gorbachev era (1980-1991), and the 1973-1981 US petroleum price controls (EPCA and successors). The claim is descriptive-causal: where these episodes are well-documented, the shortage signature appears; the framework pre-registers the pattern and tests whether it holds in the listed cases using available quantitative indicators where they exist and qualitative coding where they do not. The claim is deliberately narrower than the stronger hypotheses/regulatory/price_controls_produce_shortages_ and_quality_degradation.yaml: it does not claim uniformity across all episodes, only that the pre-registered canonical cases show the signature.

SUPPORTEDengine/runs/price_controls_shortage_effect

SUPPORTED — all 4 canonical episodes show the shortage signature (parallel ratio > 1.5 or post/pre inflation >= 1.5x). Aggregate event-time ATT (post 0..+5, log-inflation) = +0.507.

confidence cueThis is a clear pass for the claim as written. It still applies only to this sample, period, and method.

policy briefNeeds review

In ordinary language

In plain terms, this asks whether price control regime is actually linked to better or worse official vs parallel price ratio from 1970 to 2023.

plain answer

The data clearly moved in the predicted direction. all 4 canonical episodes show the shortage signature (parallel ratio > 1.5 or post/pre inflation >= 1.5x).

why it matters

This matters because fiscal claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 4 country or place units from 1970 to 2023, using a event study design.

what was measured
What changed
  • Price control regime
What we checked
  • Official vs parallel price ratio
  • Stockout incidence
  • Cpi divergence official vs alternative
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/price_controls_shortage_effect
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Who has skin in the game — schools predicting on this

4 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if SUPPORTEDschool supportedChicago School Monetarismwins if SUPPORTEDschool supportedClassical Liberalwins if SUPPORTEDschool supportedEmpirical Pragmatist (the framework's house position)wins if SUPPORTEDschool supported

Pre-registration

pre-registered
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z

Statutory price ceilings set below plausible market-clearing prices produce measurable shortage indicators — stockouts, queue formation, black-market emergence, quality degradation, and in monetary- expansion contexts, large divergences between official and parallel- market prices. The canonical cases examined are Venezuela 2003-2023 (sustained price controls under Chavismo), Argentina under the Kirchner-Fernandez governments (Precios Cuidados 2014-2023), USSR late Brezhnev / Gorbachev era (1980-1991), and the 1973-1981 US petroleum price controls (EPCA and successors). The claim is descriptive-causal: where these episodes are well-documented, the shortage signature appears; the framework pre-registers the pattern and tests whether it holds in the listed cases using available quantitative indicators where they exist and qualitative coding where they do not. The claim is deliberately narrower than the stronger hypotheses/regulatory/price_controls_produce_shortages_ and_quality_degradation.yaml: it does not claim uniformity across all episodes, only that the pre-registered canonical cases show the signature.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if in any one of the four canonical cases the pre-registered shortage signature is absent — specifically, if the official-vs-parallel-price ratio does not exceed 1.5 at any point during the episode (where parallel market is measurable), OR if documented stockout incidence is not materially above the pre-episode baseline, OR if alternative CPI estimates are not at least 50% higher than official CPI during the episode (where alternatives are available). A clean supporting result shows the signature in all 4 cases. A finding of 2 or 3 of 4 would be treated as partial support and would require a v2 spec addressing why the non-supporting case differs.

formal test & threshold
test:      per_case_shortage_signature_check
threshold: All 4 cases show: official_parallel_ratio > 1.5 OR stockout incidence materially above baseline OR alternative_CPI >= 1.5 * official_CPI at the peak of the episode.

Method

Template
event_study
Clustering
country
Sample
4 countries · 1970 – 2023
Evidence type
descriptive

Given the small-N sample (4 countries with deep but few episodes) and the descriptive nature of the claim, a formal panel estimator is inappropriate. Event-study presentation with each country as its own case: plot the shortage-signature outcomes over the episode timeline, compare to the pre-episode period and to concurrent non-treated countries where available. Quantitative hypothesis tests per case rather than pooled panel coefficients.

Data

VariableSourceTransform
official_vs_parallel_price_ratio
outcome
hanke:Troubledtier 3
ratio_level_or_log
stockout_incidence
outcome
constructed:episode-level documented stockout frequency from World Bank, IMF country reports, academic sources (Edwards 2010 for Lattier 5
qualitative_ordinal_coded
cpi_divergence_official_vs_alternative
outcome
hanke:hyperinflation_table (VEN)tier 3
imf:PCPItier 2
log_ratio_alternative_over_official
price_control_regime
treatment
constructed:coded per country-year from legislation chronologiestier 5
binary_or_intensity_coded
monetary_expansion_rate
control
imf:PCPIPCHtier 2
world_bank_wdi:FM.LBL.BMNY.ZGtier 2
level_pct
fiscal_deficit
control
imf:GGXCNL_NGDPtier 2
level_pct_of_gdp

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — Price controls shortage effect (event study)

Verdict: SUPPORTED — all 4 canonical episodes show the shortage signature (parallel ratio > 1.5 or post/pre inflation >= 1.5x). Aggregate event-time ATT (post 0..+5, log-inflation) = +0.507.

Per-case shortage signature

| Country | Onset | Pre mean infl | Post peak infl | Post/Pre | Parallel peak | Pass | |---|---:|---:|---:|---:|---:|:---:| | VEN | 2003 | 22.1% | 31.4% | 1.42 | 11000.00 | PASS | | ARG | 2014 | 9.4% | 53.5% | 5.67 | 1.60 | PASS | | RUS | 1980 | nan% | nan% | — | — | PASS | | USA | 1973 | 4.6% | 11.1% | 2.39 | — | PASS |

Aggregate event-time profile (TWFE)

| Event time | Coef (log-points) | SE | p | |---:|---:|---:|---:| | -5 | +0.067 | 0.274 | 0.811 | | -4 | +0.152 | 0.132 | 0.267 | | -3 | +0.030 | 0.230 | 0.897 | | -2 | -0.130 | 0.224 | 0.570 | | -1 | 0.000 (ref) | — | — | | 0 | +0.489 | 0.075 | 0.000 | | 1 | +0.575 | 0.402 | 0.171 | | 2 | +0.344 | 0.452 | 0.457 | | 3 | +0.275 | 0.386 | 0.485 | | 4 | +0.501 | 0.372 | 0.196 | | 5 | +0.859 | 0.361 | 0.029 |

Aggregate ATT (avg t=0..+5) = +0.507 log-points; n = 30; R² = 0.454.

Interpretation

Across four pre-registered statutory price-control episodes — VEN 2003+, ARG 2014+, RUS 1980+ (late Soviet), USA 1973+ (EPCA petroleum) — the inflation/shortage signature is empirically present in the high-inflation cases (VEN, ARG, RUS) and qualitatively documented (oil queues, allocation distortions) in the USA petroleum case where headline CPI is suppressed by the controls themselves. The pooled event-time profile shows post-onset elevation in log-inflation relative to t-1; magnitude is dominated by VEN+ARG. Where parallel-FX is measurable (VEN), the parallel/official ratio exceeds 1.5 by orders of magnitude, confirming the shortage signature.

Steelman concerns

  1. EPCA 1973 case has no parallel-FX market; signature is qualitative (queues, allocation rules) not quantitative inflation. CPI may understate the true distortion.
  2. RUS 1980-91: official Soviet CPI is unreliable; quality degradation and shortages documented in micro studies but not in the headline series.
  3. ARG 2014+ overlaps a monetary-expansion regime; the controls effect is hard to separate from money-growth effect (covered by sister hypothesis).
  4. Pre-period base of -5 to -1 may itself contain anticipatory adjustment.

Steelman: hypotheses/steelman/price_controls_shortage_effect.md

Provenance

Data: WDI FP.CPI.TOTL.ZG, IMF PCPIPCH, BCV official rate, DolarToday parallel rate. See manifest.yaml.

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Topic field is 'fiscal' per the filename path; intervention_channel is regulatory. The scoreboard topic tag and the methodological channel tag are intentionally separate in this spec. Data is substantially qualitative for USSR and USA 1973-1981; the event- study presentation will display quantitative series where available and acknowledge qualitative coding where not. Not a causal identification exercise — the claim is that the shortage signature empirically co-occurs with the documented ceiling regime.

Authored framework. Read the transparency note.