Barren shelves: COVID-19 and panic buying of food

People rush to supermarkets and buy what they can carry. Comprehensible, but unnecessary.

To cut a long story short: COVID-19 has not affected the food availability in countries. Yet, when Ryan Buckley who prepares for field research with us at ICRISAT reaches his supermarket in the 19th arrondissement in Paris, he stands before barren shelves. Milk, bread, rice and tins of preserved foods – basic staples run out of stock. It looks like someone swept shelf contents into boxes and carried them away. Ryan sees people running up and down the corridors along the shelves, looking for eatable stuff. He spots a yoghurt and a bag of pasta, leftovers, overlooked by those who search for food to be stocked at home. Most of the remaining staples are either bio or “higher” quality foods. People rush to supermarkets preparing for a shutdown. Ryan witnesses panic buying – herd behavior, the human response to anticipated shortages of goods and services.

Although supermarket managers and consumer associations assure that there is no shortage of food, mid-March 2020 different versions of panic buying take place in major cities around the world. Signs of this herd behavior I also recognized in Nairobi where I live and work. On Friday 13 March 2020 – on the day the Kenyan Government announces a series of nation-wide public health measures to contain the spread of COVID-19, people stood queues in the supermarket. They purchased and carried home what they felt could help their families to outlast the anticipated disruption of the food supply. During an emergency – perceived or real – individuals deviate from routines. And if this happens in large numbers, those calling for ‘rational choice’ have a hard time to make themselves heard.

People waiting to get inside Monoprix on Avenue Jean Jaures, Paris, 18 March 2020 (Photo Credit: Ryan Buckley)

Panic buying of food – triggered by COVID-19 public health measures – demonstrates a social dynamic well described in the academic literature. And there is something to learn about panic buying from other realms of life. Look at social dynamics at the Stock Exchange in downtown Manhattan, Frankfurt or Tokyo. Recall the hand-waving brokers hysterically pointing at trading screens. As the first brokers start buying or selling stock, others observe, then follow, assuming those taking fast decisions have an advantage over all the others, perhaps insider knowledge. Within minutes, others join – and through virtual networks prompt synchronised economic decisions on financial markets. Suddenly it seems everyone does what everyone else is doing – buying or selling the same stocks. Neither are these decisions necessarily rational nor do they emerge from a thorough analysis. They rather express the perceived opinion of a majority. Often these opinions result in dysfunctional decision-making outcomes. The sudden rush for food compares to herd behavior on stock markets. And this behavior is different from stockpiling food, a thoroughly useful strategy when done in reasonable quantities over a longer period. Needless to say that those who financially cannot afford, neither stockpile nor panic buy or even hoard foodstuff.

On phone Ryan and I compare notes from Paris and Nairobi. And although we should talk about the study design to analyze the impact of social organization in farmer groups on the performance of crop seed systems in Tanzania, we spend time analyzing the most recent panic buying incidents. There are parallels between the psychology of technology adoption and the forces driving herd behaviour. Only that herd behaviour happens much faster.

Reality is a social construction. Hence, it is not the mere existence of verified information about sufficient stocks and supplies that matters, but the perceived shortage of food by people – the subjective framing of reality by humans. Public clarifications could not stop the crowd from rushing to supermarkets. Cognitive and social forces drive panic buying, and these are partly a result of the collective framing of reality.

Shelves empty of pasta, rice, and toilet paper. Fresh produce, dairy, meat were restocked a day after, Monoprix, Avenue Jean Jaures, Paris, 18 March 2020 (Photo Credit: Ryan Buckley)

Forces at play

Strong interrelated forces drive people into supermarkets and let Ryan stand before empty shelves. Here are a few that matter.

1. Trust– Trust of people in market institutions, the administration and the private sector influences herd behaviour. Mistrust spreads quickly in society, often develops versions of the truth and eventually rumours.
2. Fear– Fear is an emotion, probably the most obvious driver of panic buying of food.
3. Loss aversion– Humans tend to avoid future losses. Instable food prices, for example, or the anticipation of the same can prompt people to exhibit panic buying. Better buy now to minimise welfare losses.
4. Short time horizons– During stress, humans exhibit behaviors with short time horizons. They would buy food now, even though today’s food purchase may be loss-making.
5. Reputation– Individuals attributed with certain information advances – those who run first – often lead the crowd. These role models inspire, prompt and influence others.

These are important forces to understand technology adoption of farmers. As I observe people pouring into supermarkets on Friday 13 March in Nairobi, several of these forces are at play.

In most places, it wasn’t the food stock but staff refilling shelves that were at a minimum. So far, supply chains are sufficiently resilient to supply food to those who can afford.

But mistrust, fear and misinformation picked on social media, from neighbors or on public transport then become a powerful mix able to mobilize hundreds of people within a few hours.

Positive feedback drives herd behaviour. The same applies to panic buying of food. Negative feedback slows a social pattern. It’s important to support negative feedback in response to false narratives.

Mediators

Several factors mediate the response of a group, community or society, city, district or a country to perceived food shortages.

1. Food prices– People are sensitive to food prices. The more rapidly food prices of lead commodities increase – think of the basics such as wheat, meat or rice – the more likely people feel to lose out if they don’t purchase food in bulk while affordable. Sometimes consumers notice food price changes with a delay, but once they do, they respond at large.
2. Purchasing power– The ability of consumers to afford food matters a lot for herd behaviour. Who leads the panic buying in a society? I’d argue the middle class and upper-class; not necessarily those with little income who can’t afford to stockpile foods anyways.
3. Information– Access to accurate information about food logistics, supply chains and the ability of supermarkets to deliver sufficient foods in future (‚Our stocks are filled‘) help, especially when communicated early in the process (once the crowd moves it is too late).

So, what to do about panic buying the leaves shelves barren in supermarkets? Is there anything society and governments can do to reduce the likelihood of panic buying? Short answer, yes. Long answer, it’s not straightforward.

Increase public resilience

One is timely, regular and accurate communication by trustworthy public sources. The print media, TV and radio, therefore, have a huge responsibility. They must also fact-check and correct false information spreading through social media.

Second, ensure that food distribution networks remain operational. Keep shelves filled.

Third, price controls on staples. Traditional price building regulated by demand and supply would have to be suspended.

Also, an honest public discourse about food demand and supply during COVID-19 I consider pertinent. Open conversation shapes a positive narrative. Public silence does the opposite.

COVID-19 is unprecedented. And to manage the crisis well, we must manage our behavior. Not helpful are two extremes –hysteria and ignorance. Both reinforce panic buying of food.

This article is originally published at: https://mhauser.at/?p=2026

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Photo credit: Top image by Paul Townsend, Flickr, Creative Commons, original image, https://creativecommons.org/licenses/by-sa/2.0/legalcode