Abstract
Hoarding by households is often associated with commodity market panics and bubbles. Using US supermarket scanner data on household purchases during the 2008 Global Rice Crisis, we provide an estimate of household hoarding when export bans led to a spike in prices worldwide in the first half of 2008. We distinguish unwarranted hoarding from rational precautionary demand by comparing the timing of purchases with the expectations implied by futures markets for US rice. Even as futures traders expected little risk of shortages in early May, households significantly increased their purchases from April to June. Some of this increase came from households with no previous purchases or demonstrable taste for rice. We then estimate the effect of hoarding on prices by documenting mean reversion in growth rates of prices in counties with large amounts of hoarding.
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