Panic buying

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Panic buying (alternatively hyphenated as panic-buying; also known as panic purchasing) occurs when consumers buy unusually large amounts of a product in anticipation of, or after, a disaster or perceived disaster, or in anticipation of a large price increase or shortage.

Contents

Panic buying during health crises is influenced by "(1) individuals' perception of the threat of a health crisis and scarcity of products; (2) fear of the unknown, which is caused by emotional pressure and uncertainty; (3) coping behaviour, which views panic buying as a venue to relieve anxiety and regain control over the crisis; and (4) social psychological factors, which account for the influence of the social network of an individual." [1]

Panic buying is a type of herd behavior. [2] It is of interest in consumer behavior theory, the broad field of economic study dealing with explanations for "collective action such as fads and fashions, stock market movements, runs on nondurable goods, buying sprees, hoarding, and banking panics." [3]

Fishing-rod panic buying in Corpus Christi, Texas during the COVID-19 Pandemic. Fishing-rod panic buying.jpg
Fishing-rod panic buying in Corpus Christi, Texas during the COVID-19 Pandemic.

Panic buying can lead to genuine shortages regardless of whether the risk of a shortage is real or perceived; the latter scenario is an example of self-fulfilling prophecy. [4]

Examples

Panic buying occurred before, during, or following:

See also

Related Research Articles

Toilet paper Tissue paper for cleaning after defecation or urination

Toilet paper is a tissue paper product primarily used to clean the anus and surrounding area of feces after defecation and to clean the perineal area of urine after urination or other bodily fluid releases. It also acts as a layer of protection for the hands during these processes. It is usually supplied as a long strip of perforated paper wrapped around a paperboard core for storage in a dispenser near a toilet. Most modern toilet paper in the developed world is designed to decompose in septic tanks, whereas some other bathroom and facial tissues are not. Toilet paper comes in various numbers of plies, from one- to six-ply, with more back-to-back plies providing greater strength and absorbency.

Rationing Controlled distribution of scarce resources, goods, or services

Rationing is the controlled distribution of scarce resources, goods, services, or an artificial restriction of demand. Rationing controls the size of the ration, which is one's allowed portion of the resources being distributed on a particular day or at a particular time. There are many forms of rationing, and in western civilization people experience some of them in daily life without realizing it.

Consumer goods in the Soviet Union were usually produced by a two-category industry. Group A was "heavy industry", which included all goods that serve as an input required for the production of some other, final good. Group B was "consumer goods", final goods used for consumption, which included food, clothing and shoes, housing, and such heavy-industry products as appliances and fuels that are used by individual consumers. From the early days of the Stalin era, Group A received top priority in economic planning and allocation so as to industrialize the Soviet Union from its previous agricultural economy.

Price controls Governmental restrictions on the prices that can be charged for goods and services

Price controls are restrictions set in place and enforced by governments, on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of goods even during shortages, and to slow inflation, or, alternatively, to ensure a minimum income for providers of certain goods or to try to achieve a living wage. There are two primary forms of price control: a price ceiling, the maximum price that can be charged; and a price floor, the minimum price that can be charged. A well-known example of a price ceiling is rent control, which limits the increases in rent. A widely used price floor is minimum wage. Historically, price controls have often been imposed as part of a larger incomes policy package also employing wage controls and other regulatory elements.

Rationing in the United Kingdom

Rationing was introduced temporarily by the British government several times during the 20th century, during and immediately after a war.

Shortage Economic demand that exceeds supply

In economics, a shortage or excess demand is a situation in which the demand for a product or service exceeds its supply in a market. It is the opposite of an excess supply (surplus).

Bullwhip effect Economic phenomenon in which small shifts in consumer demand cause disproportionately large reactions in the supply chain

The bullwhip effect is a distribution channel phenomenon in which demand forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in consumer demand as one moves further up the supply chain. The concept first appeared in Jay Forrester's Industrial Dynamics (1961) and thus it is also known as the Forrester effect. It has been described as “the observed propensity for material orders to be more variable than demand signals and for this variability to increase the further upstream a company is in a supply chain”.

Rationing in Cuba

Rationing in Cuba refers to the system of food distribution known in Cuba as the Libreta de Abastecimiento. The system establishes the amounts of subsidized rations each person is allowed to receive through the system, and the frequency at which supplies can be obtained. While the food rations are not free, the ration fees are a small fraction of the actual price of the goods. Purchases of the goods can also be made outside of the system, but they are typically too expensive for most Cubans to afford.

A market run or run on the market occurs when consumers increase purchasing of a particular product because they fear a shortage. As a market run progresses, it generates its own momentum: as more people demand the item, the supply line becomes unable to keep up. This causes a local shortage, which in turn encourages further hoarding.

Economic policy of the Nicolás Maduro administration

When elected in 2013, Nicolás Maduro continued the majority of existing economic policies of his predecessor Hugo Chávez. When entering the presidency, President Maduro's Venezuela faced a high inflation rate and large shortages of goods that was left over from the previous policies of President Chávez. These economic difficulties that Venezuela was facing were one of the main reasons of the current protests in Venezuela. President Maduro has blamed capitalism for speculation that is driving high rates of inflation and creating widespread shortages of staples, and often said he was fighting an "economic war", calling newly enacted economic measures "economic offensives" against political opponents he and loyalists state are behind an international economic conspiracy. However, President Maduro has been criticized for only concentrating on public opinion instead of tending to the practical issues economists have warned the Venezuelan government about or creating any ideas to improve the economic situation in Venezuela such as the "economic war".

Rationing in the United States

Rationing is the controlled distribution of scarce resources, goods, or services, or an artificial restriction of demand. Rationing controls the size of the ration, which is one person's allotted portion of the resources being distributed on a particular day or at a particular time.

Shortages in Venezuela

Shortages in Venezuela of regulated food staples and basic necessities have been widespread following the enactment of price controls and other policies under the government of Hugo Chávez and exacerbated by the policy of withholding United States dollars from importers under the government of Nicolás Maduro. The severity of the shortages has led to the largest refugee crisis ever recorded in the Americas.

Impact of the COVID-19 pandemic on the food industry Impact of COVID-19

The COVID-19 pandemic affects the global food industry as governments close down restaurants and bars to slow the spread of the virus. Across the world, restaurants' daily traffic dropped precipitously compared to the same period in 2019. Closures of restaurants caused a ripple effect among related industries such as food production, liquor, wine, and beer production, food and beverage shipping, fishing, and farming.

Medical materials and other goods shortages caused by the COVID-19 pandemic quickly became a major issue of the pandemic. The matter of pandemic-related shortage has been studied in the past and has been documented in recent events. On the medical side, shortages of personal protective equipment such as medical masks, gloves, face shields, gear, sanitising products, are also joined by potential shortage of more advanced devices such as hospital beds, ICU beds, oxygen therapy, ventilators and ECMO devices. Human resources, especially in terms of medical staff, may be drained by the overwhelming extent of the epidemic and associated workload, together with losses by contamination, isolation, sickness or mortality among health care workers. Territories are differently equipped to face the pandemic. Various emergency measures have been taken to ramp up equipment levels such as purchases, while calls for donations, local 3D makers, volunteer staffing, mandatory draft, or seizure of stocks and factory lines have also occurred. Bidding wars between different countries and states over these items are reported to be a major issue, with price increases, orders seized by local government, or cancelled by selling company to be redirected to higher bidder. In some cases, medical workers have been ordered to not speak about these shortages of resources.

Economic impact of the COVID-19 pandemic Economic effects of the COVID-19 pandemic

The COVID-19 pandemic has had far-reaching consequences beyond the spread of the disease itself and efforts to quarantine it. As the SARS-CoV-2 virus has spread around the globe, concerns have shifted from supply-side manufacturing issues to decreased business in the services sector. The pandemic caused the largest global recession in history, with more than a third of the global population at the time being placed on lockdown.

Economic impact of the COVID-19 pandemic in the United States Overview of the impact of the COVID-19 pandemic on U.S. economy

The economic impact of the COVID-19 pandemic in the United States has been largely disruptive, adversely affecting travel, financial markets, employment, shipping, and other industries.

Famines related to the COVID-19 pandemic Famines related to the pandemic caused by coronavirus disease 2019.

The COVID-19 pandemic–related famines, also known as the coronavirus famine or coronavirus food crisis, are a series of currently ongoing famines that began in late 2019. The famines are a result of the 2019–20 locust infestation, the COVID-19 recession and measures taken to prevent the spread of the COVID-19 pandemic. Ongoing wars and political turmoil in some nations are also considered to be local causes. It is projected by Oxfam that by the end of 2020 "12,000 people per day could die from COVID-19 linked hunger", with the United Nations stating that a total of 265 million people face acute food insecurity – an increase of 135 million people as a result of the pandemic. Altogether, at least 10% and as much as 20% of the global population is believed to be affected in some form or another due to famines caused in 2020. The famines are widely considered to be the worst series of famines since the Great Chinese Famine in 1959–61, and is projected to be among the worst famines in human history.

Impact of the COVID-19 pandemic on retail

The COVID-19 pandemic has taken a sharp economic toll on the retail industry worldwide as many retailers and shopping centers were forced to shut down for months due to mandated stay-at-home orders. As a result of these closures, online retailers received a major boost in sales as customers looked for alternative ways to shop and the effects of the retail apocalypse were exacerbated. A number of notable retailers filed for bankruptcy including Ascena Retail Group, Brooks Brothers, GNC, J. C. Penney, Lord & Taylor and Neiman Marcus.

References

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