Toilet paper panic-buying mystified me at first. Of things you need in great volume if you’re quarantined for 2 weeks, it’s not high on the list. (You can fire up your bidet in a pinch). But there are two things I now realize about it:
1. As a commodity of uniquely high physical volume, TP offers very few units per metre of shelf space. Supermarkets are just-in-time stocked, with minimal back room warehousing — when you’re out, the distributor restocks.
This easily creates a visual perception of scarcity
This easily creates a visual perception of scarcity
2. This visual appearance of declining supply — despite near-unlimited actual supply — has a psychological effect. Of course, TP is the dictionary definition of a demand-inelastic product; you’ll pay whatever for it. You’ll also perceive an emptying shelf as reason to buy...
...even if you have a reasonable TP stock and are an otherwise rational consumer.
The end result is that toilet paper is a unique product in that it can create panic buying without any actual panic buyers.
Consider the empty-shelf effect...
The end result is that toilet paper is a unique product in that it can create panic buying without any actual panic buyers.
Consider the empty-shelf effect...
If discretionary TP purchasing rises even slightly above a low baseline on a one-time occasion, it will create shelf gaps that send a misleading message about scarcity AND an exaggerated perception of ongoing panic buying that incentivizes you to buy above your needed quantities
.... It is presumably very hard to break this cycle, because more rapid shelf restocking of TP will not restore a sense of abundance (as with eg canned beans) but will amplify the sense that OTHERS are panic buying due to a visible velocity increase.
Your only rational response is to “hamster” it yourself. Today I saw our supermarket had zero toilet paper of any sort; though we have 2 weeks’ worth, I will hamster some rolls tomorrow morning because it LOOKS LIKE THAT MAY BE MY ONLY CHANCE — the volume illusion at work
“Veblen goods” are a@known phenomenon — products that defy usual laws of elasticity because luxury psychology makes higher prices an incentive.
Maybe we need do understand “Charmin goods” where physical volume triggers unnecessary consumption by creating an illusion of scarcity
Maybe we need do understand “Charmin goods” where physical volume triggers unnecessary consumption by creating an illusion of scarcity
Another thing @GArmoured pointed out is that TP is a very low-margin item — its profit per shelf real estate cost is low and maybe negative; it may be a loss leader. So there are incentives not to stock much of it.
Amplifying the illusion: panic buying without panic buyers
Amplifying the illusion: panic buying without panic buyers
