Consumer panic in the COVID-19 pandemic

Abstract

We develop an econometric model of consumer panic (or panic buying) during the COVID-19 pandemic. Using Google search data on relevant keywords, we construct a daily index of consumer panic for 54 countries from January to late April 2020. We also assemble data on government policy announcements and daily COVID-19 cases for all countries. Our panic index reveals widespread consumer panic in most countries, primarily during March, but with significant variation in the timing and severity of panic between countries. Our model implies that both domestic and world virus transmission contribute significantly to consumer panic. But government policy is also important: Internal movement restrictions-whether announced by domestic or foreign governments-generate substantial short run panic that largely vanishes in a week to ten days. Internal movement restrictions announced early in the pandemic generated more panic than those announced later. In contrast, travel restrictions and stimulus announcements had little impact on consumer panic.

The Impact of COVID-19 and Public Health Emergencies on Consumer Purchase of Scarce Products in China

“…Finally, we found that after excluding the impact of social isolation, our model is still significant. This shows that although the government's isolation and restrictive policies can cause panic ( 53 ), they are not entirely responsible for causing panic, which is influenced by various factors. Future research may be carried out from the perspective of panic sources, such as the public, experts, and media, to explore the effects of these sources on panic-buying behavior, which will help to clarify the psychological mechanism of panic buying in more detail, and propose targeted strategies or policies.…”

A Biopsychosocial Approach to Understanding Panic Buying: Integrating Neurobiological, Attachment-Based, and Social-Anthropological Perspectives

“…Perceived scarcity of resources and lack of access to them have both been linked with panic buying ( 13 , 21 , 66 ). This finding is consistent both with the psychological and social aspects of this model, in which the accumulation of objects symbolizes safety and security, as well as with the postulated evolutionary roots of hoarding and related behaviors ( 32 , 35 ).…”

“…Panic buying, also referred to as “stockpiling,” is characterized by the purchase of “unusually large amounts of products,” in anticipation of or during a natural or man-made disaster, related to a fear of shortage of unavailability of the concerned products, which are usually food or hygiene-related items ( 10 , 11 ). Panic buying has been documented as a local response to phenomena such disease outbreaks or typhoons ( 12 , 13 ), but has occurred on an unprecedented scale in the context of COVID-19 and the attendant restrictions imposed in an attempt to contain the spread of the disease ( 14 ).…”

“…Social and economic factors : local severity of the pandemic ( 13 , 20 ); perception of scarcity or of an increase in price ( 21 ); lack of trust in public authorities ( 19 , 21 ); misinformation ( 20 , 21 ); restrictions on internal movement ( 13 ); pre-existing psychiatric illness ( 24 ).…”

“…His model has also highlighted the potential role of social learning or imitation in reinforcing maladaptive cognitions regarding the risk of food shortage or scarcity of other essential supplies. From a broader socioeconomic perspective, Keane and Neal ( 13 ) have highlighted the role of local and international patterns of viral transmission, as well as government-imposed restrictions on internal (but not external) movement, in influencing panic buying.…”