In times of heightened uncertainty, consumers face incentives to build up precautionary stocks of essential supplies. We study consumer spending dynamics during one such time, the first infection wave of the COVID-19 pandemic, using household scanner data covering fast-moving consumer goods in the United Kingdom. We document large increases in demand for storable products, such as food staples and household supplies, in the days before lockdown. Households in all socio-economic groups exhibit unusually high demand pre-lockdown, but there is a clear gradient, with the largest demand spikes for wealthier households. Although stories of people purchasing extreme amounts received a lot of attention, higher aggregate demand was mainly driven by more households than usual choosing to buy storable products, with only small increases in average quantities bought on a given trip. Temporary limits on the number of units per transaction, introduced following the demand spike, are therefore unlikely to lead to the avoidance of stock-outs.
Authors

Research Fellow University of Wisconsin
Martin, previously Deputy Research Director, is a Research Fellow at IFS and Professor of Economics at the University of Wisconsin.

Research Fellow University College London
Áureo is an applied econometrician with strong interests in both methodological and empirical questions, affiliated with UCL, Cemmap, IFS and CEPR.

Research Fellow London School of Economics
Kate is an IFS Research Fellow and an Assistant Professor at LSE, interested in public finance, industrial organisation and applied microeconomics.
Journal article details
- DOI
- 10.1111/1475-5890.12271
- Publisher
- Wiley
- Issue
- Volume 42, Issue 2, June 2021
Suggested citation
O'Connell, M., Smith, K., and de Paula, Á. (2021), 'Preparing for a pandemic: spending dynamics and panic buying during the COVID-19 first wave', Fiscal Studies, 42(2), https://doi.org/10.1111/1475-5890.12271
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