Being bolted down is not enough in booming Shanghai where a crackdown has begun on scrap metal thieves stealing phone booths, traffic lights, manhole covers and wiring. Tempted by soaring prices for metal, thieves stripped one residential compound of two thirds of its fire extinguishers.This is a good application of how high demand for one good (construction) affects other markets (high demand for scrap metal). My guess is that stealing scrap metal is partially a result of the inelastic supply of scrap metal, which makes the price change from an increase in demand higher. Since the supply of scrap metal in the short run cannot increase very much, thieves are stepping in by taking existing structures and turning them into scrap metal to take advantage of the high prices.
Wednesday, October 19, 2005
I just posted two days ago about the booming construction market in China. Further evidence is this article on scrap metal thieves in Shanghai: