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Salience and medication panic buying

Author

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  • Lyu, Xueying
  • Cai, Xiqian
  • He, Daixin

Abstract

We study the health risks associated with pandemics as a causal channel causing medication panic buying. Using a unique administrative dataset from March 2018 to March 2020 covering 1.4 million patients in 314 primary community hospitals in a major Chinese city, as well as a difference-in-differences approach, we find that the COVID-19-related health risks led to hospital expenditure exceeding normal levels by 18.7%. This increase was primarily driven by a significant rise in medication expenses, which surpassed normal levels by 29.2%. We further explore three possible mechanisms of bottom-up attention, contrasting, surprising, and prominent stimuli, and demonstrate that they are the key channels through which the salience effect causes panic buying.

Suggested Citation

  • Lyu, Xueying & Cai, Xiqian & He, Daixin, 2025. "Salience and medication panic buying," Journal of Economic Behavior & Organization, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:jeborg:v:234:y:2025:i:c:s0167268125000691
    DOI: 10.1016/j.jebo.2025.106949
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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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