The egg shortage turns consumers to chickens

A couple of weeks ago, I blogged about the current egg shortage. When the quantity of eggs demanded by consumers is greater than the quantity of eggs suppliers by sellers at the current market price, there is a shortage. Some consumers, who would be willing and able to pay the market price, will miss out on eggs. How do consumers respond? In my earlier post, I argued that consumers would bid the price upwards, and the market price would rise. However, that is not the only consumer response. As the New Zealand Herald reported earlier this week:

Interest in online auctions for chickens has more than doubled amid a nationwide egg shortage.

Trade Me spokesperson Ruby Topzand said searches for chickens, coops and feed had risen to more than 21,400 in the past week - up from 9300, a 129 per cent increase...

Store-purchased eggs and home-laid eggs are substitutes. When the price of one substitute increases, some consumers will switch to the other. Switching to substitutes can also occur when one good has a shortage (which is the case for eggs at the moment). So, some consumers are switching from store-purchased eggs to home-laid eggs, by buying their own chickens.

Are home-laid eggs cheaper? Not necessarily. The monetary cost per egg may be lower, but the consumer needs to factor in both up-front costs (not just the cost of the chickens, but the cost of the coop for the chickens to live in) and ongoing costs of feed for the chickens. And then, there is also a surprising amount of labour involved in raising chickens (not least the time it takes to find eggs laid by the devious fowl). The time and effort, as well as the monetary cost, may make home-laid eggs a more expensive option for most consumers (as well as many consumers not having a property that is suitable for keeping chickens). That's why few consumers own their own chickens already.

However, even with the costs of home-laid eggs, the shortage has induced at least some consumers to make the switch. What will they do when the egg shortage is over?