This paper analyzes the toilet paper run of March 2020 across nine U.S. cities, examining the rationality behind the buying frenzy and evaluating the welfare effects of potential policy interventions. I develop a dynamic demand model that incorporates stockpiling behavior, persistent taste heterogeneity, rational expectations, product differentiation, and availability. Using panel scanner data from retail sales and household purchases (2018–2021), I structurally estimate the model with an innovative algorithm, iteratively updating simulated maximum likelihood estimators from the traditional split estimation procedure designed for homogeneous tastes. The findings suggest that rational consumers participated in the toilet paper run due to anticipated stockouts. Methodologically, I find that ignoring product availability and persistent taste heterogeneity reduces both the efficiency and accuracy of the estimation. Counterfactual simulations show that preemptive warnings about potential stockouts improve consumer welfare; however, such warnings are risky, as a general equilibrium analysis suggests that changes in behavior by a small proportion of consumers could still trigger a run. Surprisingly, increasing the availability of certain product sizes is found to decrease consumer welfare due to excessive stockpiling. Therefore, the autonomous quantity rationing imposed by retailers may have inadvertently reduced consumer welfare.
This paper estimates the household income effects of Xi Jinping’s "Big Bang" anti-corruption campaign in China. Using data from two household panel surveys (2010–2018), I apply a difference-in-difference (DID) framework that leverages temporal variations introduced by the Central Committee of Discipline Inspections. The results indicate a significant decline in household income following the campaign, an effect that remains robust across various specifications and placebo tests. Additionally, I document a post-campaign reduction in the income premium for politically connected groups, including Communist Party members, employees of State-Owned Enterprises (SOEs), and Public Institutions. I explore potential mechanisms behind this income contraction and find suggestive evidence pointing to capital misallocation between SOEs and private firms, likely driven by heightened political scrutiny and information asymmetry in banking. Furthermore, government transfers nearly halved post-campaign, worsening the income decline. However, households partially offset this income shock through reciprocal private transfers within social networks.