When it comes to hoarding toilet paper, rice and pasta, Australia is a world beater.
Australian researchers have created a panic index to measure hoarding of goods during the coronavirus crisis.
Tim Neal and Mike Keane at the UNSW Business School used Google search data to measure panic buying across 54 countries from January to mid-April.
The results show Australia was one of the countries most affected by panic buying, experiencing widespread shortages of essential goods during 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 is 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 implementation of social distancing caused significant and immediate panic that dissipated over a week to 10 days.
“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 mitigate panic buying in future crises.
Supermarkets use a just-in-time supply chain and the level of panic changes in response to certain policy announcements.
“With appropriate warning from government, supermarkets could mitigate panic buying by either trying to signal abundance or signal scarcity,” says Dr Neal.
“To signal abundance, in the days leading up to a major announcement, the supermarket can shift stock of toilet paper and certain other goods from warehouses and distribution points to supermarket floors (e.g. 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."
Australia went early with panic buying, as these charts show:
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