With one year of lockdowns and quarantines, many are now looking back at 2020 and commenting on how everything seems pretty much the same as it was when this all began. There is one notable exception though: unlike last year, the reports of panic buying and hoarding have become less prevalent, even with the reintroduction of the enhanced community quarantine and now the modified version. What has changed?
Consumer behavior is one of the traditional topics of economics, and the phenomenon of stocking up on goods in an emergency falls squarely under that category. One might recall how last year, photos on social media and reports on the Internet were rife with posts about empty shelves and filled pushcarts at supermarkets. Netizens were posting their stories about how everyone seemed to be buying things out left and right like there was no tomorrow!
For a time, this panic buying seemed to be pure madness. People stocked up on face masks, food, cleaning products, vitamins, medicines, and everything in-between. It became so overblown that at least one viral post caught a person trying to purchase as many skin-whitening products as possible. One wonders what they intended to do with all of it. Then for a few weeks, shortages of nearly every kind of good imaginable were the norm as the pandemic hit.
A primary assumption in traditional economics is that consumers in the market are supposed to behave in at least a somewhat rational manner. Acts of buying due to hysteria seem to be the perfect counterexample. Then again, one might argue that there is no such thing as a panic buyer, for in a world of risk and uncertainty, with scarce resources to avail of, who can blame people for acting in such a manner? No one wants to die in such a situation.
Thus the self-fulfilling prophecies of economics take effect: whether it’s a bank run or a shortage of any good, the logic is the same. It was not long before the Department of Trade and Industry stepped in and set limits on goods in order to prohibit citizens from buying certain products in huge amounts. Government mandates and quarantine passes served to limit the number of persons going out as well.
Of course, the implementation of those policies came with their own problems: Consider the breadwinner of a multigenerational household, for example. How could one lone person, the only one allowed to leave the home, manage to purchase enough goods for their four children, spouse, and parents or in-laws under one roof without looking brazen?
It is so easy to form the unfair mental image of a hoarder: a miser who sits alone in a large home, relaxing on a comfortable chair, surrounded by a supply of products they couldn’t possibly use up by themselves—a mountain of skin-whitening products, perhaps—as the rest of the world weeps. In reality though, not everyone has enough space to sufficiently store large quantities of nonperishables, and buying an obscene amount of perishables runs the risk of spoilage.
No, ultimately it wasn’t just the implementation of policies that curbed panic buying. The development of more efficient logistics chains, the advent of greater and necessary trust in online buying and selling, the availability of delivery services, and even the realization among consumers that some kinds of panic buying are not worth it due to spatial limitations, all contributed to the dying down of the issue as well.
That said, as people scramble to buy goods, online or otherwise, under the new-old quarantine rules, will there be another wave of extreme panic buying in the event that an absolute lockdown becomes imminent? So far, while people are scared of the rising numbers of cases, the fact that many have gotten used to this uncomfortable system by necessity, and have become more judicious, seems to have prevented a resurgence of panic buying and hoarding. The higher prices of goods could also have been a factor to influence consumer decision-making as Filipinos continue to save and tighten their belts.
In the end, it really would all depend on the public perception regarding how the situation will be. Speculation and fear could always return, after all, and with the numbers of reported Covid-19 cases climbing steadily, this may happen very soon. Will history repeat itself in this case, as people cope with anxiety? The burden to not repeat the mistakes of the past falls on every individual participating in the market economy.
Harald Eustachius A. Tomintz teaches at the Department of Economics of the Ateneo De Manila University.