Behavioral economist on emergency supplies
“Faeser’s recommendation triggers elementary fears”
5/3/2022 6:41 p.m
Behavioral economist Christian Chlupsa hopes that Home Secretary Nancy Faeser has thought carefully about her recommendation for emergency supplies and has spoken to the major grocers beforehand. In an interview with ntv.de, he explains why consumers will hoard again, how we could moderate ourselves – and what he himself stores in the basement. The professor teaches at the FOM University for Economics & Management in Munich.
ntv.de: What do you think of Interior Minister Faeser’s recommendation for an emergency supply?
Christian Chlupsa: I assume that the federal government is better informed than we are. If it is the case that we should stock up, private stocks make sense, of course, because retailers cannot keep stocks ready for all German citizens. I just want to hope that Ms. Faeser or the ministry has agreed with the retail trade that such a recommendation will be made. Because we have seen with toilet paper, oil and the like that this leads to reactions. People will hoard again. So it would make sense if retailers knew what to expect.
Doesn’t the minister trigger fears of war and consequently panic buying?
A recent study showed that a large proportion of people who did not have Covid-19 suffer from post-Covid. Due to Corona and the Ukraine war, everyone is obviously at the limit. Everything that you add to it in terms of reminders and fears should be justified. Of course, such recommendations trigger fears, and quite elementary ones: I can no longer provide food for my family. That’s not trivial, you should be very careful with it. My hope, therefore, is that the recommendation was made because the situation is indeed serious.
Behavioral economist Christian Chlupsa
(Photo: Christian Vogel)
The Germans were hoarding because of the Ukraine war even before Faeser’s recommendation – as they did in the Corona crisis. What is it that drives people?
There are different effects. First: social media. Our perception hardly differentiates between what I see myself and what I see on social networks. Even if my supermarket still has stocked shelves, but I see empty shelves online, I’m firmly convinced that I’ll have to hoard. Social media really makes people panic at this point. Studies show that users who reduce their social media consumption have more zest for life.
What factors are still making us hamster?
The herd instinct. If you take two packs of toilet paper in the supermarket and I stand behind you, I’ll take three. This creates a snowball effect – everyone packs something on top to be on the safe side. Then the shelves empty faster and we see a shortage to which we react even more. So we make life difficult for ourselves – and of course we harm others. The herd instinct could also be observed with corona protective masks: Many wanted to continue wearing them in the supermarket without being obliged to do so, but then the masks fell off relatively quickly in the truest sense of the word. We want security, but on the other hand we want to offend as little as possible in society.
The head of the trade association, Stefan Genth, believes that hoarding is a German phenomenon, while the shelves in other countries are full. Why is that?
Social media works here too. My friends abroad laugh at us there because they have all the oils available. However, you have to take into account that the prices there have risen massively, for example they have doubled and tripled for oil. Then of course the purchase also depends on whether I can afford it. This will increase in the Ukraine crisis. You have no German income in Italy, Portugal or Greece. If oil suddenly costs 3 euros instead of 99 cents, you will think about it with a monthly income of 300 or 400 euros. The German can still grab the shelf. Economics Minister Robert Habeck rightly pointed this out with regard to energy prices: we can still afford a lot in Germany, but people in southern Europe or internationally are quickly out.
Is the current hoarding actually unusual or do people get carried away with it on a regular basis?
This is a normal phenomenon, people want to have enough reserves. You can go back to ancient times or probably to the ancient Egyptians who stored in vessels. Supplies such as salt or olive oil were also valuable. What’s new is that when you used to have empty supermarket shelves in Berlin, I didn’t notice anything in Munich. Now someone posts a picture on social media and others think toilet paper is scarce everywhere. That creates the dynamic, we push each other up on social media.
How can consumers be discouraged from such irrational purchases?
One would have to make everyone aware of social media consumption and activity. Whenever I share something, I trigger something. Of course, this also applies to other topics, especially false reports about the Ukraine war. We once examined the social media activities surrounding the Munich rampage because our university was right in the middle. There was a lot of panic, right up to the GSG-9 mission in Munich, because people shared pictures of mission exercises in the USA on their cell phones and wrote underneath that this was going to happen live in Munich. You can do a lot of mischief with a cell phone like that.
Where is the healthy amount of supplies then – what should everyone have at home just in case?
Without wanting to start the next panic, the focus should be on water. Because water reserves are relatively easy to attack. Although the infrastructure in Germany is monitored daily, it is relatively difficult to secure. Personally, I put a water reserve in the basement for a few days in case something happened to the tap water. With the forest fires in Greece, for example, the water reserves were the first to run out, and people had nothing left to drink. In addition to water, you should buy canned food with high nutritional values that you don’t have to heat up – what’s the use of noodles if you can’t cook them. In addition, for example, crispbread that does not go bad. And very important: chocolate for the soul.
Christina Lohner spoke to Christian Chlupsa