IMPACT OF INFLATION ON CONSUMER SPENDING PATTERNS IN URBAN PAKISTAN: A QUANTITATIVE STUDY

Abstract

This paper analyzes consumer behavior by using survey data regarding the expenditures of the households in Pakistan in the years 2019 and 2024 with a focus on the effects of inflation. twelve hundred households, with the help of stratified random sample technique, were interviewed across five major cities of Pakistan including Karachi, Lahore, Islamabad, Peshawar, and Quetta in order to examine consumer behavior due to increased inflation rates. The spending analysis report shows that most of the essential needs and wants are pretty much constant in terms of percentage change across the periods analyzed, whereas the other subsets of needs and wants encompassed under food and personal care, entertainment, dining, and luxury goods display considerable drops in percentages.Income level was found as an important moderator and it elucidated that the middle-income house hold had the highest elasticity of spending change. Also, it emerged that education level influenced the ways through which they coped with inflation such as buying in large qualities and resigning to cheaper brands. The study aids the understanding of consumer behavior during an economic crisis particularly
in the developing economies and proved to be helpful for the policymakers for devising relevant policies for the provision of relief assistance, protection and for the marketers and companies who are interested in creating an inflation proof marketing strategies in the context of Pakistani urban consumers.

Keywords- Inflation, consumer spending, urban Pakistan, household economics, price elasticity, consumption
patterns, economic behavior, financial adaptation