Hoarding (economics)

Hoarding in economics refers to the concept of purchasing and storing a large amount of product belonging to a particular market, creating scarcity of that product, and ultimately driving the price of that product up. Commonly hoarded products include assets such as money, gold and public securities,^[1] as well as vital goods such as fuel and medicine.^[2] Consumers are primarily hoarding resources so that they can maintain their current consumption rate in the event of a shortage (real or perceived).^[3] Hoarding resources can prevent or slow products or commodities from traveling through the economy.^[4] Subsequently, this may cause the product or commodity to become scarce, causing the value of the resource to rise.

A common intention of economic hoarding is to generate a profit by selling the product once the price has increased. Hence, economic speculators tend to hoard products that are inelastic in price so that when the price of the product does increase, the demand for that product is maintained.^[5][2] Unlike investing, hoarded goods are excluded from an economy’s flow of money^[6] and generally occurs in markets operating under a non-competitive structure.^[7] The practice of hoarding can have varied effects in the economy and is legal in most cases, however price controls and other regulatory laws are often enforced to prevent negative market implications.^[8] Under Islamic jurisprudence, intentional acts of economic hoarding are regarded as a highly sinful and unlawful.^[2]