Panic Buying and Its Causes: A Case Study of the US Toilet Paper Market

Abstract

Panic buying refers to a sudden increase in the consumption of certain goods due to perception or expectation of adverse situations. The goal of this paper is to explore the psychological factors that drive panic buying during a pandemic, more specifically, the global-wise COVID-19 outbreak. Literature review showed that perceived risk, lack of social capital, and anxiety coping can be the potential causes of panic buying during a pandemic. A case study of the US toilet paper market during COVID-19 was conducted. Throughout March 2020 and following months, sales of toilet paper increased significantly compared to pre-COVID times, implying the US population panic buying toilet paper at the time. Data from previous research projects and nation-wide surveys were analyzed, and it showed that the afore-mentioned three psychological factors were also present, on one degree or another, at the time in the US: People on average experienced a medium level of perceived risk from the disease; The level of social trust remained medium and the level of social support from neighbors decreased after the outbreak, both of which are components of social capital; And people in general experienced high levels of anxiety during the pandemic. Understanding the underlying drivers of panic buying can provide insights into alleviating such irrational buying behavior in the future.