Salience and medication panic buying

Xueying Lyu, Xiqian Cai and Daixin He

Journal of Economic Behavior & Organization, 2025, vol. 234, issue C

Abstract: We study the health risks associated with pandemics as a causal channel causing medication panic buying. Using a unique administrative dataset from March 2018 to March 2020 covering 1.4 million patients in 314 primary community hospitals in a major Chinese city, as well as a difference-in-differences approach, we find that the COVID-19-related health risks led to hospital expenditure exceeding normal levels by 18.7%. This increase was primarily driven by a significant rise in medication expenses, which surpassed normal levels by 29.2%. We further explore three possible mechanisms of bottom-up attention, contrasting, surprising, and prominent stimuli, and demonstrate that they are the key channels through which the salience effect causes panic buying.

Keywords: COVID-19; Hospital expenditure; Medication panic buying; Salience (search for similar items in EconPapers)
JEL-codes: D83 I12 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:234:y:2025:i:c:s0167268125000691

DOI: 10.1016/j.jebo.2025.106949

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