Impact of Rising Inflation on Consumer Buying Behavior: Evidence from Middle-Class Households in Pakistan

Abstract

This study examines the impact of rising inflation on consumer buying behavior among middle-class households in Pakistan, with empirical evidence drawn from Swabi and Mardan. In the context of persistent inflationary pressures and declining purchasing power, the research investigates how households adjust their consumption patterns, prioritize expenditures, and adopt coping strategies. The study is based on primary data collected from 200 middle-class households using a structured questionnaire complemented by in-depth interviews to capture both quantitative trends and qualitative insights. Employing descriptive statistics and regression analysis, the findings reveal that inflation significantly alters consumer behavior, leading to reduced consumption of non-essential goods, increased price sensitivity, and a marked shift toward lower-cost substitutes. Additionally, households demonstrate adaptive strategies such as quantity reduction, brand switching, and prioritization of essential commodities, particularly food and utilities. The qualitative evidence further highlights psychological stress and changes in financial planning among households facing sustained price increases. The results contribute to the existing literature by providing micro-level evidence from urban Pakistan and by integrating behavioral responses with economic constraints. The study concludes with policy implications, emphasizing the need for targeted subsidies, effective price control mechanisms, and social protection measures to safeguard middle-class welfare in inflationary periods.