Forces at play
Strong interrelated forces drive people into supermarkets and let Ryan stand before empty shelves. Here are a few that matter.
- 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.
- Fear – Fear is an emotion, probably the most obvious driver of panic buying of food.
- 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.
- 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.
- 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.
Several factors mediate the response of a group, community or society, city, district or a country to perceived food shortages.
- 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.
- 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.
- 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.