Consumer Behavior in Crisis:

The Interplay of Panic Buying During Shortages

Danielle Grace V. Ventura

Nathan Caleb H. Geray

Grade 9 - Integrity

October 10, 2024

Table of Contents
I. Introduction
Economic Statement
II. Body:
- Problem Statement
- Hypothesis
- Research
- Guide
- Analysis and Conclusion
III. References
Introduction
The topic of economics goes beyond the social science of production, consumption, and
distribution of goods and services. It studies people’s behavior to satisfy their unlimited needs
and wants while using limited resources. However, economics presents issues that challenge both
producers and consumers as they strive to meet their limitless demands and desires within the
confines of limited resources. One of which is a shortage, which refers to a lack of supply of
products and services created by unfavorable strategies. Shortages have an impact on consumers
because it causes constraints for consumers to completely meet their needs and wants due to the
lack of supply. It also affects consumers as businesses boost their prices due to a lack of goods
and services. It may also result in non-price rationing systems, wherein consumers face
restrictions on how much they can purchase. Being knowledgeable about shortages significantly
leads to an improved daily lifestyle as individuals become aware of their economic behavior in
making disciplined decisions, especially when an economic problem arises, particularly when a
shortage occurs. Consumers and producers should be educated about shortage enabling them to
formulate solutions that may lessen or even stop the shortage problem. Although shortage may
sometimes be mistaken as scarcity, shortage significantly eventually results in scarcity if
producers and consumers remain oblivious about this economic concern affecting their economic
behaviors, resorting to poor solutions such as panic buying and hoarding.
 I. Problem Statement

The researchers will address the problem of panic buying as a negative strategy leading to the
economic problem of shortage. Panic buying is a negative strategy wherein consumers make
mass purchases, which typically occur before or just right after a disaster. It is often described as
overbuying because consumers buy more than what they need, which causes a shortage of goods.
This strategy or behavior is often driven by anxiety and fear of consumers not getting enough
supplies ahead of time, leading individuals to panic buy to stock up on their essentials, which
greatly decreases the supply of goods. According to CFI, concerning panic buying in the
financial markets, the stimulus is often “fear of missing out"—often referred to as FOMO. When
investors see the price of an asset rapidly rising, they fear they may be missing out on a golden
opportunity to make a lot of money. Therefore, they rush to invest large amounts of capital in the
asset, hoping for a huge profit in return. In simpler words, panic buying has the possibility of
resulting in upward pressure on prices, commonly known as inflation.
II. Hypothesis
In this modern world, consumers are prone to the influence of social dynamics, especially by the
media particularly conversations that talk about economic concerns like economic uncertainty
possibly caused by disasters. This can affect the psychological response of consumers leading
them to fear and anxiety causing them to shift to a negative solution—panic buying. As
consumers continue to act on this fear, demands will increase rapidly eventually leading to an
immediate shortage in stores. Social media affects the behavior of consumers in terms of
receiving the news with the possibility of consuming unreliable information or even causing
them to resort to the fear of missing out on economic updates which triggers their ability to shift
to an impulsive unfavorable response to the situation. To mitigate the negative impact of panic
buying caused by social dynamics and media coverage, consumers can practice conscious and
rational buying, and consumers should stay informed but avoid overconsumption of media.
These two possible solutions will benefit the consumer to practice a healthy consumption routine
and disciplined behavior by lessening the influence of social news which might provide false
updates.
III. Research
According to a blog by Psychology Today that briefly discusses ways to mitigate panic buying,
one of the recommended solutions to lessen panic buying is sticking to the facts. In connection to
conscious and rational buying, this will benefit consumers by allowing them to practice healthier
consumption behavior and avoid panic and fear about news from social media that may bring
false updates. They can practice fact-checking or confirming the news that they have received by
doing their research and settling on news that clearly shows proof and evidence rather than
complicated misinforming news to avoid overreaction and impulsive responses. Sticking to the
facts also supports the hypothesis of staying updated yet limiting our consumption of the media.
Appropriately limiting consumption of media is an advantage for consumers to prevent being
overwhelmed with too much information. The blogger shares that consumption of too much
news makes people misinformed and results in “more panic than comfort.” Wise consumers
should be disciplined enough not to be influenced by misinformation and be aware of their
limitations when it comes to acquiring crucial information, especially from social media.
IV. Plan/Guide
These are simple plans that could be taken to educate people to avoid purchasing an
extraordinary number of items to cope with the probability of future shortages. This guide covers
a plan and recommendations for consumers to avoid the act of panic buying, preventing the
cause of a shortage in the economy of a community or country.

1. Do not be immediately affected by social media news about economic concerns. Don't let
social media news about economic issues immediately influence your opinions or actions.
Information shared online can often be exaggerated or misrepresented, which can lead to
unnecessary stress. Instead, take a moment to seek confirmation and look for reliable news
outlets before resorting to undesirable solutions. This way, you'll be better informed without
letting fear or uncertainty drive your decisions.

2. Create an emergency communication plan to easily record important contact information that
people can interact with.
In connection with the first recommendation, ensure to set up an emergency communication plan
that includes key contact information, making it easy for people to access and use when needed.
Ensure that this plan is simple to update and share, so everyone knows how to get in touch
during emergencies. This recommendation will help individuals as they seek confirmation about
the updates they’ll read from social media news and other sources of information, especially
during disasters in economic uncertainties.

3. Consider saving money in an emergency savings account that could be used in any crisis.
There will be no certainty of what problems may arise when an economic crisis occurs, therefore
wise consumers should practice the habit of saving money in case of an emergency to prevent
overconsumption of money when buying products during or after an economic disaster happens.
This assures individuals that their income will be enough to cover their needs when they
encounter the time of shortage that may lead to increased inflation in the economy.
4. When a shortage strikes, prepare a list of goods to purchase to avoid getting overwhelmed and
sidetracked.
Once a shortage strikes or the word about expecting an economic crisis gets out, panic buying
will undoubtedly happen. However, applying intelligent decision-making as a wise consumer
should not hinder them from avoiding negative influence from other consumers. One way to
achieve intelligent decision-making is by preparing a list of things to buy when visiting the store
to prevent them from feeling anxious and getting sidetracked on what should be done. Specifying
the amounts and portions of the products they need to purchase should be included in the list to
prevent them from disregarding the list prepared.

V. Analysis and Conclusion

Extraordinary purchasing of multiple items, often seen during emergencies, is a common

response driven by fear and uncertainty. Panic buying significantly impacts society by creating
shortages, which can prevent many people from accessing essential goods. This behavior
disrupts the balance of the supply chain and leads to price inflation, making it increasingly
difficult for individuals to afford necessities. This phenomenon was globally witnessed during
the outbreak of COVID-19 and has also been evident in other historical disasters and medical
crises. Such actions cause various serious effects on social stability, and understanding the
underlying factors contributing to panic buying is crucial. By examining this behavior within its
proper context, we can develop better strategies to mitigate its negative impacts and ensure fair
access to resources during times of crisis. We, the researchers, have concluded that essentially
applying intelligent decision-making as a consumer and disciplining oneself concerning media
consumption are basic simple solutions that can mitigate panic buying that may lead to a
shortage. We strongly advise consumers to be responsible for the news and updates they read and
normalize fact-checking first before jumping to conclusions especially when they decide to act
impulsively.
References:
Hayes A. (2024, June 28) Economics Defined with Types, Indicators, and Systems. Investopedia.
https://www.investopedia.com/terms/e/economics.asp
CFI Team. Panic Buying - Overview, Causes, Practical Examples. CFI
https://corporatefinanceinstitute.com/resources/career-map/sell-side/capital-markets/panic-buyin
g/
Hamilton, K. (2020, March 11). Why we panic buy, and what we should do instead. Psychology
Today.
https://www.psychologytoday.com/us/blog/valley-girl-brain/202003/why-we-panic-buy-and-wha
t-we-should-do-instead