Examining The Effects of Inflation on The Purchasing Power of Basic Goods: A Case Study of Kanyama, Lusaka, Zambia

Abstract

This study focused on the impact of inflation in Kanyama Constituency, with emphasis on household purchasing power and consumption patterns. The objectives were to measure inflation rates for a selected basket of goods (2019–2025), assess changes in purchasing power, and analyse the link between inflation and consumption. Data were collected from 50 households using structured questionnaires and analysed in STATA through descriptive statistics, paired t-tests, chi-square tests, and multiple regression models. Results show average prices rose by 131–159%, with peaks of 294%, confirming a historic inflationary shock. Affordability collapsed, with 66% of households rating their ability to afford essentials as “very low.” Chi-square tests confirmed a significant relationship between income and affordability (χ² (6) = 16.00, p = 0.014). Paired t-tests indicated households consumed 40–55% less food than in 2020 (p < 0.001). Food budget shares grew from 41.7% in 2020 to 48.6% in 2025, squeezing non-food expenditure. Coping mechanisms included borrowing (30%), reducing portions (28%), and skipping meals (20%), highlighting worsening food insecurity. Regression analysis identified income bracket as the strongest predictor of budget allocation (coef ≈ 20.65, p < 0.001; R² ≈ 0.80), while price shifts and household size were insignificant. These findings confirm that fragile incomes, rather than price changes alone, drive vulnerability. The study concludes that inflation in Kanyama has severely undermined livelihoods, eroded purchasing power, and deepened inequality. It recommends urgent income support, social protection, price stabilization, and financial inclusion policies to strengthen household resilience and wellbeing.