Consumer Response to Price Hikes During Economic Downturns: A Behavioral Economics Study in Nigeria

Pelumi Jumoke OLOKESUSI

doi:10.56201/ijebm.vol.11.no11.2025.pg134.157

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Consumer Response to Price Hikes During Economic Downturns: A Behavioral Economics Study in Nigeria

Pelumi Jumoke OLOKESUSI

Abstract

Using the behavioral economics theoretical framework, this study examines how Nigerian consumers react to price increases during recessions. It seeks to comprehend how consumers adjust psychologically and behaviorally to growing costs and diminishing purchasing power. Under the direction of four research goals, the study examined how well-informed consumers were about price changes, how they responded to inflation, how price increases affected their purchasing power, and how demographic factors, such as income, affected consumer behavior. 400 respondents from Nigeria's main urban and semi-urban areas were given a structured questionnaire as part of the study's quantitative design. Descriptive and inferential statistics, such as regression, ANOVA, and correlation, were used to analyze the data. The findings showed that 90% of consumers were aware of price changes and that coping mechanisms such as cutting back on non-essential expenditure, switching brands, and delaying purchases were widely used. Regression analysis verified that price hikes significantly predict changes in consumer behavior (? = 0.680, p < 0.01) and harm purchasing power (? = -0.340, p < 0.01). In contrast, correlation analysis demonstrated a strong positive relationship between price hikes and consumer behavioral response (r = 0.721, p < 0.01). According to the ANOVA results, consumer reactions are strongly influenced by income level (F = 9.416, p < 0.05), with lower-income consumers showing greater susceptibility to inflationary pressures. The results demonstrate that Nigerian consumers exhibit logical but emotionally influenced decision-making during economic hardship, consistent with Prospect theory and Bounded Rationality theory. The study concludes that, especially for low-income groups, inflation reduces purchasing power and forces adaptive consumption behaviors. To stabilize prices, it advises Nigerian officials to give consumer protection, incom

Keywords

Price Hikes; Consumer Behavior; Economic Downturn; behavioral Economics;

References

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Consumer Response to Price Hikes During Economic Downturns: A Behavioral Economics Study in Nigeria

Abstract

Keywords

References

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