IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v13y2020i8p166-d392102.html
   My bibliography  Save this article

Consumer Behaviour during Crises: Preliminary Research on How Coronavirus Has Manifested Consumer Panic Buying, Herd Mentality, Changing Discretionary Spending and the Role of the Media in Influencing Behaviour

Author

Listed:
  • Mary Loxton

    (Discipline of International Business, University of Sydney, Sydney, NSW 2006, Australia)

  • Robert Truskett

    (Discipline of International Business, University of Sydney, Sydney, NSW 2006, Australia)

  • Brigitte Scarf

    (Discipline of International Business, University of Sydney, Sydney, NSW 2006, Australia)

  • Laura Sindone

    (Discipline of International Business, University of Sydney, Sydney, NSW 2006, Australia)

  • George Baldry

    (Discipline of International Business, University of Sydney, Sydney, NSW 2006, Australia)

  • Yinong Zhao

    (School of Economics, Fudan University, Shanghai 200433, China)

Abstract

The novel coronavirus (COVID-19) pandemic spread globally from its outbreak in China in early 2020, negatively affecting economies and industries on a global scale. In line with historic crises and shock events including the 2002-04 SARS outbreak, the 2011 Christchurch earthquake and 2017 Hurricane Irma, COVID-19 has significantly impacted global economic conditions, causing significant economic downturns, company and industry failures, and increased unemployment. To understand how conditions created by the pandemic to date compare to the aforementioned shock events, we conducted a thorough literature review focusing on the presentation of panic buying and herd mentality behaviours, changes to discretionary consumer spending as defined by Maslow’s Hierarchy of Needs, and the impact of global media on these behaviours. The methodology utilised to analyse panic buying, herd mentality and altered patterns of consumer discretionary spending (according to Maslow’s theory) involved an analysis of consumer spending data, largely focused on Australian and American markets. Here, we analysed the volume and timing of consumer spending patterns; the volumes of spending on specific, highly-demanded consumer goods during the investigative period; and the distribution of spending on luxury and non-durable goods to identify the occurrence of these consumer behaviours. Moreover, to identify the presence of the media in influencing consumer behaviour we focused on web traffic to media sites, alongside keyword and phrase data mining. We conclude that, to date, consumer behaviour during the COVID-19 crisis appears to align with behaviours exhibited during historic shock events. We hope to contribute to the body of research on the early months of this pandemic before longer-term studies are available.

Suggested Citation

  • Mary Loxton & Robert Truskett & Brigitte Scarf & Laura Sindone & George Baldry & Yinong Zhao, 2020. "Consumer Behaviour during Crises: Preliminary Research on How Coronavirus Has Manifested Consumer Panic Buying, Herd Mentality, Changing Discretionary Spending and the Role of the Media in Influencing," JRFM, MDPI, vol. 13(8), pages 1-21, July.
  • Handle: RePEc:gam:jjrfmx:v:13:y:2020:i:8:p:166-:d:392102
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/13/8/166/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1911-8074/13/8/166/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Clee, Mona A & Wicklund, Robert A, 1980. "Consumer Behavior and Psychological Reactance," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 6(4), pages 389-405, March.
    2. Keane, Michael & Neal, Timothy, 2021. "Consumer panic in the COVID-19 pandemic," Journal of Econometrics, Elsevier, vol. 220(1), pages 86-105.
    3. repec:cup:cbooks:9780511771576 is not listed on IDEAS
    4. Dang, Ha V. & Lin, Mi, 2016. "Herd mentality in the stock market: On the role of idiosyncratic participants with heterogeneous information," International Review of Financial Analysis, Elsevier, vol. 48(C), pages 247-260.
    5. Unknown, 2014. "Media Coverage 2014," 2014: Ethics, Efficiency and Food Security: Feeding the 9 Billion, Well, 26-28 August 2014 225573, Crawford Fund.
    6. Paul Slovic & Melissa L. Finucane & Ellen Peters & Donald G. MacGregor, 2004. "Risk as Analysis and Risk as Feelings: Some Thoughts about Affect, Reason, Risk, and Rationality," Risk Analysis, John Wiley & Sons, vol. 24(2), pages 311-322, April.
    7. Susan Black & Tom Cusbert, 2010. "Durable Goods and the Business Cycle," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 11-18, September.
    8. Wei Liu & Xiao-Guang Yue & Paul B. Tchounwou, 2020. "Response to the COVID-19 Epidemic: The Chinese Experience and Implications for Other Countries," IJERPH, MDPI, vol. 17(7), pages 1-6, March.
    9. Owen Freestone & Danial Gaudry & Anthony Obeyesekere & Matthew Sedgwick, 2011. "The rise in household saving and its implications for the Australian economy," Economic Roundup, The Treasury, Australian Government, issue 2, pages 61-79, September.
    10. Easley,David & Kleinberg,Jon, 2010. "Networks, Crowds, and Markets," Cambridge Books, Cambridge University Press, number 9780521195331.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jing Zeng & Jiuchang Wei & Dingtao Zhao & Weiwei Zhu & Jibao Gu, 2017. "Information-seeking intentions of residents regarding the risks of nuclear power plant: an empirical study in China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 87(2), pages 739-755, June.
    2. Huang, Lei & He, Ruoying & Yang, Qianqi & Chen, Jin & Zhou, Ying & Hammitt, James K. & Lu, Xi & Bi, Jun & Liu, Yang, 2018. "The changing risk perception towards nuclear power in China after the Fukushima nuclear accident in Japan," Energy Policy, Elsevier, vol. 120(C), pages 294-301.
    3. Billore, Soniya & Anisimova, Tatiana, 2021. "Panic buying research: A systematic literature review and future research agenda," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue Early Vie.
    4. Blazquez-Soriano, Amparo & Ramos-Sandoval, Rosmery, 2022. "Information transfer as a tool to improve the resilience of farmers against the effects of climate change: The case of the Peruvian National Agrarian Innovation System," Agricultural Systems, Elsevier, vol. 200(C).
    5. Getz, Donald & Page, Stephen J., 2016. "Progress and prospects for event tourism research," Tourism Management, Elsevier, vol. 52(C), pages 593-631.
    6. Raman Kachurka & Michał W. Krawczyk & Joanna Rachubik, 2021. "Persuasive messages will not raise COVID-19 vaccine acceptance. Evidence from a nation-wide online experiment," Working Papers 2021-07, Faculty of Economic Sciences, University of Warsaw.
    7. Martin L. Weitzman, 2015. "A Voting Architecture for the Governance of Free-Driver Externalities, with Application to Geoengineering," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(4), pages 1049-1068, October.
    8. Oliver Wagner & Thomas Adisorn & Lena Tholen & Dagmar Kiyar, 2020. "Surviving the Energy Transition: Development of a Proposal for Evaluating Sustainable Business Models for Incumbents in Germany’s Electricity Market," Energies, MDPI, vol. 13(3), pages 1-17, February.
    9. James K. Hammitt, 2020. "Valuing mortality risk in the time of COVID-19," Journal of Risk and Uncertainty, Springer, vol. 61(2), pages 129-154, October.
    10. Huaiyuan Zhai & Mengjie Li & Shengyue Hao & Mingli Chen & Lingchen Kong, 2021. "How Does Metro Maintenance Staff’s Risk Perception Influence Safety Citizenship Behavior—The Mediating Role of Safety Attitude," IJERPH, MDPI, vol. 18(10), pages 1-20, May.
    11. Scorgie, Fiona & Khoza, Nomhle & Delany-Moretlwe, Sinead & Velloza, Jennifer & Mangxilana, Nomvuyo & Atujuna, Millicent & Chitukuta, Miria & Matambanadzo, Kudzai V. & Hosek, Sybil & Makhale, Lerato & , 2021. "Narrative sexual histories and perceptions of HIV risk among young women taking PrEP in southern Africa: Findings from a novel participatory method," Social Science & Medicine, Elsevier, vol. 270(C).
    12. Kang, Min Jung & Park, Heejun, 2011. "Impact of experience on government policy toward acceptance of hydrogen fuel cell vehicles in Korea," Energy Policy, Elsevier, vol. 39(6), pages 3465-3475, June.
    13. Wei Zhong, 2017. "Simulating influenza pandemic dynamics with public risk communication and individual responsive behavior," Computational and Mathematical Organization Theory, Springer, vol. 23(4), pages 475-495, December.
    14. Sunil S. Poshakwale & Pankaj Chandorkar, 2019. "The Impact of Aggregate and Disaggregate Consumption Shocks on the Equity Risk Premium in the United Kingdom," Annals of Economics and Finance, Society for AEF, vol. 20(2), pages 489-524, November.
    15. Tony McDonald & Steven Morling, 2011. "The Australian economy and the global downturn, Part 1: Reasons for resilience," Economic Roundup, The Treasury, Australian Government, issue 2, pages 1-31, September.
    16. Branden B. Johnson, 2017. "Explaining Americans’ responses to dread epidemics: an illustration with Ebola in late 2014," Journal of Risk Research, Taylor & Francis Journals, vol. 20(10), pages 1338-1357, October.
    17. Joanna Sokolowska & Patrycja Sleboda, 2015. "The Inverse Relation Between Risks and Benefits: The Role of Affect and Expertise," Risk Analysis, John Wiley & Sons, vol. 35(7), pages 1252-1267, July.
    18. Robinson, Angela & Covey, Judith & Spencer, Anne & Loomes, Graham, 2010. "Are some deaths worse than others? The effect of 'labelling' on people's perceptions," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 444-455, June.
    19. Guo Weilong & Minca Andreea & Wang Li, 2016. "The topology of overlapping portfolio networks," Statistics & Risk Modeling, De Gruyter, vol. 33(3-4), pages 139-155, December.
    20. Garthwaite, K.A. & Collins, P.J. & Bambra, C., 2015. "Food for thought: An ethnographic study of negotiating ill health and food insecurity in a UK foodbank," Social Science & Medicine, Elsevier, vol. 132(C), pages 38-44.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:13:y:2020:i:8:p:166-:d:392102. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.