Consumer Panic in the COVID-19 Pandemic

35 Pages Posted: 18 May 2020

See all articles by Michael P. Keane

Michael P. Keane

University of New South Wales

Timothy Neal

UNSW Australia Business School, School of Economics

Date Written: May 11, 2020

Abstract

We develop an econometric model of consumer panic (or panic buying) during the COVID-19 pandemic. Using Google search data on relevant keywords, we construct a daily index of consumer panic for 54 countries from January to late April 2020. We also assemble data on government policy announcements and daily COVID19 cases for all countries. Our panic index reveals widespread consumer panic in most countries, primarily during March, but with significant variation in the timing and severity of panic between countries. Our model implies that both domestic and world virus transmission contribute significantly to consumer panic. But government policy is also important: Internal movement restrictions - whether announced by domestic or foreign governments - generate substantial short run panic that largely vanishes in a week to ten days. Internal movement restrictions announced early in the pandemic generated more panic than those announced later. In contrast, travel restrictions and stimulus announcements had little impact on consumer panic.

Keywords: Coronavirus, Hoarding, Consumption, Panel Data, Containment Policy

JEL Classification: C23, C51, D12, M31

Suggested Citation

Keane, Michael P. and Neal, Timothy, Consumer Panic in the COVID-19 Pandemic (May 11, 2020). UNSW Economics Working Paper 2020-06, Available at SSRN: https://ssrn.com/abstract=3600018 or http://dx.doi.org/10.2139/ssrn.3600018

Michael P. Keane

University of New South Wales ( email )

Sydney, NSW
Australia

Timothy Neal (Contact Author)

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

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