Number of words: 489

The Coronavirus pandemic has brought forth a curious herd behavior that has left many people bewildered – the senseless instinct to hoard toilet paper. Why are people hoarding toilet paper, but not body wash or hand soap? Wouldn’t it make more sense to hoard body wash or hand soap?

The current toilet paper hoarding behavior is an example of the scarcity effect.

The scarcity effect is a well-established phenomenon in the psychology literature, which states that perceived scarcity will increase the value of an item. That is, if people find something to be scarce, they will instinctively value that item more, even when there is no rational basis for such a response.

Several studies have found that framing something as scarce will increase its perceived attractiveness. For example, in one study, researchers found that imposing a quantity restriction on Campbell soups increased the attractiveness of a promotional offer. When Campbell soup was promoted without any quantity restriction, shoppers bought an average of 3.3 cans. But when shoppers were told that there is a limit of 12 cans on the promotional offer, they bought 7 cans on average of the same soup.

The scarcity effect is a learned evolutionary behavioral response to identify and acquire objects that are important for survival. In many instances, using scarcity as a cue for value could be a perfectly rational survival response. For example, the tendency to purchase and hoard hand sanitizers, cleaning wipes, and disinfectants could be considered as a rational response to ensure survival during this pandemic season.

However, the tendency to hoard toilet paper during this pandemic is completely irrational triggered solely by the bulky packaging size of toilet papers. Toilet paper packs are one of the bulkiest items in a grocery store. The bulky size of toilet paper packs has two important implications: (i) Retailers typically have less stock of toilet paper relative to other household products such as hand soaps and body wash. (ii) When 20 or 30 customers buy toilet paper, the retail shelves start looking empty, creating a visual cue of scarcity. The empty shelves then create panic buying. When the brick-and-mortar stores run out of toilet papers, customers start hoarding toilet papers from online stores such as Amazon, perpetuating the scarcity.

Thus, the shortage of toilet paper is caused by the simple fact that its bulky packaging creates a sense of scarcity, which creates an irrational demand for the product. Intriguingly, there is no shortage of hand soaps or body wash, although these items are also useful during this time. That is because soaps and body wash are not as bulky as toilet papers and so they do not run out on the retail shelves as frequently as toilet papers do.

In summary, during these uncertain and unsettling times, if a depleted retail shelf suggests that the product could become scarce, customers will start hoarding that product regardless of the justification for such hoarding.

Excerpted from https://www.linkedin.com/pulse/scarcity-effect-toilet-paper-hoarding-manoj-thomas