What is panic buying?

Blizzard can motivate people to panic to buy the necessary supplies.

Panic buying is the common way to describe the mass buying activity of goods as a result of anticipating or experiencing a disaster. Real or perceived scarcity and price increases are just two of the factors that can drive behavior. Panic buying is often a shopper’s attempt at self-preservation in the face of an uncertain or unstable future. Consumers will participate in the activity in such a way that they have the means to protect themselves, their families and their property.

Bottled water is a common item that people may panic about before a disaster strikes.

Natural disasters are often at the center of panic episodes. Hurricanes and blizzards, for example, can motivate people in an affected area to buy as much water, food, and emergency supplies as they can to survive the disaster. As a result, store shelves will be cleared and shoppers will stockpile products in their homes as they wait for the natural disaster and its aftermath to pass.

Panic buying can happen after a disaster.

Other events that can inspire buying panics are those that affect fuel and technology. Historically, oil shocks and protests have led consumers to buy as much fuel as possible, as a kind of “panic gas buying.” Also, many consumers feared a major technological collapse before the year 2000 and bought large amounts of emergency supplies in case basic services failed. Needless to say, food shortages also resulted in a scramble to buy the remaining staples.

While actual shortages and price increases can lead consumers to overbuy, simple rumors and fear can also lead to the same type of behavior. Rumors and fear can fuel public panic and this can result in a shortage of goods and supplies, even if there was no real shortage to begin with. In this way, scarcity can manifest simply because consumers believe it to be true and buy as many similar products as possible. The practice of panic buying goods can end in real shortages, causing even more panic and new unmet demand for scarce goods.

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To avoid the real threat of shortages due to panic buying, last-minute shoppers are advised to plan ahead. Buying what is needed to build up a year-round supply of needed items is a good alternative to help run out of supplies during a disaster. Consumers can control their needs by keeping a list of must-have items and making sure their homes always contain an adequate amount of them.

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