Balancing Supply and Demand: The Impact of Consumer Anxiety and Social Contagion on Willingness to Pay More for Food During the COVID-19 Pandemic

Abstract

This study aims to explore the effects of consumer anxiety and social contagion on willingness to pay more (WTPM) for food during instances of panic buying. Data were collected using a convenient sampling technique from consumers who made panic purchases for food during the COVID-19 pandemic. This study employed partial least squares structural equation modeling to evaluate the data of 408 consumers through survey method. The results show that the direct impacts of panic buying on WTPM were significant. In addition, consumer anxiety was positively associated with panic buying, but the relationship between consumers’ anxiety and WTPM was insignificant. Meanwhile, social contagion has a direct effect on both panic buying and willingness to pay more. This research is one of the earliest studies to explore the influence of psychological factors on panic buying and WTPM for food during the COVID-19 pandemic. Manufacturers and retailers can use the findings from this study to maintain stock availability during the COVID-19 pandemic and by governments as the basis for economic decisions.