Coronavirus: Why people panic buy toilet paper

An economics professor in the US has given an insight as to why people are panic buying toilet paper in the midst of the COVID-19 coronavirus outbreak.

Justin Wolfers from the University of Michigan says even if you're not personally concerned about an outbreak, you worry that everyone else is and they'll stockpile basic necessities before you can.

Since you don't want to be left without any toilet paper, you buy more than you need to avoid being shut out by others.

"You run and get toilet paper not because you need dozens of rolls, but because you fear that others are going to stockpile leaving none for you," Wolfers says in a series of tweets.

"And they're buying because they fear (correctly) that you're running to the store to stock up, leaving none for them."

He says the result is empty shelves because "the whole mess is created by fear".

There are two different scenarios when people buy toilet paper.

The first is "normal times" where everyone believes toilet paper will always be on the shelf, so no one stockpiles it.

The second is "panic times" where shortages are feared. It leads to stockpiling and then an actual shortage is created.

Wolfers believes the stockpiling created from panic is why there should be a government-backed "Strategic Toilet Paper Reserve".

The Reserve would make a promise that even if your local supermarket runs out of toilet paper, you would still have the right to buy two rolls per week from the government's stockpile.

"The Strategic Toilet Paper Reserve removes the incentive to stockpile. It ensures that even if you see others running to the store to stockpile toilet paper, you no longer need to try to run to beat them. You can relax, knowing that you'll still be able to wipe your bum," Wolfers says.

He closes his series of tweets with the argument that the economics of toilet paper shortages are due to unrestricted markets that could be solved with government regulation.