(BY: Jay L. Zagorsky, Senior Lecturer at the Questrom School of Business at Boston University) The other day I went into Costco to buy some toilet paper. It came as a small shock when I couldn’t find a single roll.
The new coronavirus is inspiring panic buying of a variety of household products such as toilet paper in cities across the U.S. and world.
While it makes sense to me that masks and hand sanitizer would be in short supply because of the outbreak, I wondered why people would be hoarding toilet paper – a product that is widely produced and doesn’t help protect from a respiratory virus like COVID-19. Toilet paper is becoming so valuable there’s even been at least one armed robbery.
As an economist, I am fascinated by why people hoard products that are not having supply problems. Toilet paper hoarding in particular has a curious history and economy.
Australia has also suffered from panic buying of toilet paper despite plentiful domestic supply. A risk expert in the country explained it this way: “Stocking up on toilet paper is … a relatively cheap action, and people like to think that they are ‘doing something’ when they feel at risk.”
This is an example of “zero risk bias,” in which people prefer to try to eliminate one type of possibly superficial risk entirely rather than do something that would reduce their total risk by a greater amount.
Hoarding also makes people feel secure. This is especially relevant when the world is faced with a novel disease over which all of us have little or no control. However, we can control things like having enough toilet paper in case we are quarantined.
It’s also possible we are biologically programmed to hoard. Birds, squirrels and other animals tend to hoard stuff.