A Sticky-Price View of Hoarding
Hoarding of staples has long worried policymakers due to concerns about shortages. We quantify how sticky store prices---delayed price adjustment to shocks by reputable retailers---exacerbate hoarding. When prices are sticky, households hoard not only for precautionary motives but also non-precautionary motives: they stockpile as they would during a standard retail promotion or for the purpose of retail arbitrage. Using US supermarket scanner data covering the 2008 Global Rice Crisis, an episode driven by an observable cost shock due an Indian ban on raw rice exports, we find that sticky prices account for a sizeable fraction of hoarding. Hoarding is mostly for own use and more prevalent among richer households. Our findings are consistent with media reports of distributional concerns associated with hoarding during the Covid-19 Pandemic.
This paper subsumes our earlier work on hoarding and commodity bubbles. We thank seminar participants at CICF 2019, INSEAD, Aalto, Peking University, Warwick University, Cambridge University, NBER Universities Conference on Commodities, HKUST, New York University, PUC-Rio and Yale University for helpful comments. We are also grateful to Quisha Peng, Pengfei Wang, Yuriy Gorodnichenko, Emi Nakamura, Hassan Afrousi, Michael Woodford, William Goetzmann, Hank Bessembinder, Manuel Arellano, Orazio Attanasio, Richard Blundell, Marcelo Fernandes, Bo Honoré, Guy Laroque, Valerie Lechene and Elie Tamer for useful conversations. de Paula gratefully acknowledges financial support from the European Research Council through Starting Grant 338187 and the Economic and Social Research Council through the ESRC Centre for Microdata Methods and Practice grant RES-589-28-0001. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.