Panic buying refers to a peculiar phenomenon involving a rapid spike in volume of purchase which leads to a rise in the price of the good. Panic buying was observed across many nations, including India when an immediate lockdown was imposed in March 2020. It can still be observed in places where lockdown is being imposed again.

Panic buying may or may not have an impact in the long run on an economy, depending on the duration of this phenomenon, but it creates inefficiency and disequilibrium in the short run. An economy can avoid this situation by spreading adequate and authentic information in the market and by curbing the spread of rumours.