Australia: world’s biggest panic buyers
New research released by UNSW Sydney on COVID-19 consumer panic shopping has shown that Australian consumers topped the globe in panic buying habits – in speed and scale.
UNSW Business School researchers Dr Tim Neal and Professor Mike Keane used Google search data to measure consumer panic (AKA panic buying) across 54 countries during the height of the COVID-19 pandemic, from January to mid-April. Using the data collected, Dr Neal and Professor Keane built a “panic index” – a model to help them understand how panic responds to virus transmission and policy announcements by government.
The results reveal that Australia was one of the most affected countries by panic buying in the world, causing widespread shortages of essential goods during the month of March.
“The data shows we can explain the timing and severity of panic buying using information on the spread of the virus and government policy announcements,” says Dr Neal.
“But Australia is one of the few countries where this is not true. We panicked earlier than most countries in the sample and it’s hard to explain.
“Notably, even countries that were hard hit by COVID-19 early, like Italy, panicked in mid-March, while we panicked at the start of March.”
The index also reveals the announcement of internal movement restrictions by both domestic and foreign governments caused significant and immediate panic that dissipated over a week to 10 days. Importantly, governments who announced restrictions earlier in the pandemic generated more panic than governments who announced them later.
“We found evidence that announcements of lockdowns generated significant panic, but announcements of travel restrictions did not,” says Dr Neal.
Dr Neal and Professor Keane hope the index will help governments and supermarkets to mitigate panic buying in any future crises. Since supermarkets use a “just-in-time” supply chain and panic tends to respond to certain policy announcements very quickly, they recommend that, in the event of any future COVID-style situations, governments should coordinate their strategy with supermarkets.
“With appropriate warning from government, supermarkets could mitigate panic buying by either trying to signal abundance or signal scarcity,” Dr Neal says.
“To signal abundance, in the days leading up to a major announcement, supermarkets can shift stock of toilet paper and other goods from warehouses and distribution points to supermarket floors – for example, placing a pallet of toilet paper near the entrance – to avoid the appearance of scarcity when the shelves run out of the products they need.”
Another alternative suggested by the researchers is for supermarkets to signal scarcity by announcing product limits or rationing simultaneously with the announcements made by governments, to avoid an immediate rush on the goods.