A Demographic and Socioeconomic Analysis of Inflation Aversion in Pakistan

Abstract

The study focuses on investigating the demographic and socioeconomic determinants of inflation aversion in Pakistan which is proxied by individuals’ preference of “fighting rising prices as 1st choice”. Logistic regression has been used for the purpose of estimations using the appended data of four waves (3rd, 4th, 6th and 7th waves) of World Values Survey to examine how different demographic and socio-economic variables affect inflation aversion. The results of the study exhibit that male, educated, rich, old, non-family cohabitants, those who are satisfied with the financial situation of their households and unemployed individuals are less inflation averse as compared to female, uneducated, poor, young, family cohabitants, those dissatisfied with the financial situation of households and employed ones, respectively. However, number of children, chief wage earner and status of family savings during past year show no significant impact on inflation aversion in Pakistan.  The study reports the significant role of financial literacy and socioeconomic vulnerability in shaping the public attitudes towards inflation and suggests a few policies to minimize the inflation aversion in order to attain stability in country.

Inflation Aversion, Socioeconomic Determinants, Demographic Analysis, Fighting Rising Prices, World Values Survey, Logistic Regression, Pakistan