Analyzing Inflation and its Effects on Household Economic Situation: A Case Study of Mitengo Ndola

The purpose of this study was to investigate inflation and its effects on household situation in Mitengo, Ndola. The study made use of a cross section survey allowing for qualitative statistical analysis. A structured questionnaire consisting of closed-ended questions was used to collect primary data. Regression analysis was used to establish associations between variables. The average monthly income was K10,500 (SD = K4,572.73), with household expenditure averaging K5,611.29 (SD = K4,753.43). Food expenditure consumed 32.36% of income, while transportation, education, and healthcare costs accounted for 13.39%, 13.61%, and 6.85% respectively. Housing and utility expenses averaged 9.74% and 11.89%. Inflation significantly impacted consumption, with 41.9% of participants reporting considerable effects and 58.1% experiencing extreme effects. Participants frequently adjusted their budgets, and a statistically significant relationship was found between inflation perception and budgeting adjustments (Chi-Square = 14.090, p = 0.000). Determinants such as income strata, labor market participation, and household demographics also influenced consumption, with disposable income and net worth varying significantly among participants. These findings underscored the profound impact of inflation on household financial behaviors. To mitigate the impact of inflation on household consumption, it is crucial to enhance financial literacy programs, promote income diversification, and stabilize inflation through effective policies. Targeted support for lower-income households, such as social safety nets and subsidies for essential goods, can alleviate the financial strain. Encouraging savings, prioritizing essential expenditures, and offering inflation-indexed financial products will help households manage their finances better.