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Panic at the pump

Why consumer behavior fuels the gas crisis

By Cherin Poovey (P '08)
Office of Creative Services

Gas prices across the Southeast and Midwest soared recently, and while many would blame Hurricane Ike, human nature may be a more likely scapegoat. Michelle Roehm, associate professor of marketing in the Babcock Graduate School of Management, specializes in information processing and consumer behavior.

How does the perception that there is a shortage of something, such as gasoline, affect consumer behavior?
Clearly, it makes a staple item that the consumer may previously have paid little attention to or taken for granted seem precious. It also makes very salient to us the role that the commodity plays in our everyday lives. We become acutely aware of all the things we do that are directly or indirectly powered by gasoline. And, as we think about all of this, it makes us very nervous to suggest that it might not be available to us whenever and in whatever quantity we think we might need.

Faculty Q and A

Gasoline has been called an "emotional commodity." Is this why people react the way they do?
It is a hot button, because it relates to our fundamental need to power things that make life comfortable and convenient. Threats to such things elicit emotional, rather than rational, reactions. We become concerned that we will somehow be left out of getting our proper share, and this causes us to act in aggressive ways that may differ dramatically from our normal modes of behavior.

Is there a relationship between natural disasters and "unnatural" consumer behavior?
I wouldn't limit it to natural disasters. Any disaster — or more broadly, any occurrence that significantly disrupts access to the things we consume in the everyday course of life — can ignite emotions such as anxiety and fear. Once the emotions are unleashed, consumers become much more likely to operate in the way that we've seen recently with the gas lines. And, as we've seen in this sequence of events, emotions are very powerful things. We're hard-wired to engage in protective, self-preservation behaviors when "fight or flight" instincts are triggered.

Do memories, such as of Hurricane Katrina for example, influence consumer behavior?
Absolutely, or for older consumers, it might trigger memories of the gas lines in the 1970s, or going back even farther, the scarcities of many household staples during the Great Depression and World War II. The feeling of desperation and lack of control that is instilled in those situations stays with a consumer and can promote hoarding tendencies whenever a similar situation arises afterward.

How do the media fuel irrational consumer behavior?
Media accounts inform consumer behavior. The media may stimulate consumer concern by carrying the message that supply is tightening up or that purchase quantities are being limited. This can ignite the scarcity fears in a few consumers, who then head to the gas stations. This creates a small line, which then becomes newsworthy. Other consumers hear media accounts of the diminished supply and now the line, and they then run to get in line as well. The line lengthens, and this becomes even more newsworthy. And so on.

Is this a phenomenon that is driven by marketers who want to create such a perception to increase demand?
Marketers do use scarcity to increase the perceived value of goods. For example, you see this in ads that look something like this: "Widgets 2 for a $1.00, limit 6 per customer." By constraining the number people can buy, the perception can be strengthened that this is a valuable item. This same principle applies to announcements that something like gas is in short supply. Its scarcity drives up perceived value.

The interesting thing is that, in the gas case, officials have tried to send out countervailing messages to reassure consumers that gas supplies will be fine and any small shortages will be temporary in nature. Unfortunately, this sort of rational message is not very compelling to consumers who have already had their panic buttons pushed and are making emotional decisions rather than rational ones.

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