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The Influence of Inflation on the Economic Situation of Households in Poland

Author

Listed:
  • Szwacka-Mokrzycka Joanna
  • Marzena Lemanowicz

Abstract

Purpose: After several years of deflation, one should not be surprised by emerging consumer inflation. We are facing this situation in the Polish market from 2017 onwards. In 2022 it even intensified and changed into galloping inflation, i.e., a double-digit number expresses the price increase percentage. The general objective of the article is to present the main causes of inflation and its deepening consequences for society, as well as to indicate the direction of measures to be taken to curb inflation in Poland. Design/Methodology/Approach: The study is based on primary and secondary sources of information. The secondary information source for this research was the data from Central Statistical Office GUS, Eurostat. The analysis included the years 2015-2022, which enabled capturing the inflation situation and changes in income, expenditure and consumption in Polish households. The source of primary information was the results of our own research. The level of nutritional needs satisfaction of households has been estimated based on econometric analysis methods. The evaluated elasticity factors constituted the factual basis for performing quality and quantity assessment of consumption structure. Findings: The research results touched on the main causes and directions of measures to curb inflation in Poland. The findings of the presented study point to the fact that there is a significant relationship between the level of inflation and the consumption behaviour of households. The low level of income-poor households determines the level of consumption needs saturation. The decrease in the level of satisfying lower-order food needs in the analysed period is the result of an increase in the income elasticity of demand. Practical Implications: The paper provides the results of research that help decision-makers and marketers to determine economic policy to curb inflation in Poland. Originality / Value: The paper presents the original methodological approach for estimating the level of food needs saturation. The assessment of the saturation of food needs in Poland based on the consumption elasticity of demand coefficients constituted a continuation of research conducted by authors in the 90s of the past century. The conducted analysis of changes in food consumption of Polish households in the years 2015-2021 demonstrates the inconsistency with the results from the authors' previous years, where the opposite tendency was shown

Suggested Citation

  • Szwacka-Mokrzycka Joanna & Marzena Lemanowicz, 2023. "The Influence of Inflation on the Economic Situation of Households in Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 119-132.
    • Handle: RePEc:ers:journl:v:xxvi:y:2023:i:3:p:119-132
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    References listed on IDEAS

    as
    1. Miguel Cardoso & Clodomiro Ferreira & José Miguel Leiva & Galo Nuño & Álvaro Ortiz & Tomasa Rodrigo, 2022. "The Heterogeneous Impact of Inflation on Households’ Balance Sheets," Working Papers 176, Red Nacional de Investigadores en Economía (RedNIE).
    2. Michael Weber & Francesco D'Acunto & Yuriy Gorodnichenko & Olivier Coibion, 2022. "The Subjective Inflation Expectations of Households and Firms: Measurement, Determinants, and Implications," Journal of Economic Perspectives, American Economic Association, vol. 36(3), pages 157-184, Summer.
    3. Kaplan, Greg & Schulhofer-Wohl, Sam, 2017. "Inflation at the household level," Journal of Monetary Economics, Elsevier, vol. 91(C), pages 19-38.
    4. Irene Monasterolo, 2023. "How inflation varies across Spanish households," Occasional Papers 2307, Banco de España.
    5. Michael Weber & Yuriy Gorodnichenko & Olivier Coibion, 2023. "The Expected, Perceived, and Realized Inflation of US Households Before and During the COVID19 Pandemic," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(1), pages 326-368, March.
    6. Hoffmann, Mathias & Moench, Emanuel & Pavlova, Lora & Schultefrankenfeld, Guido, 2022. "Would households understand average inflation targeting?," Journal of Monetary Economics, Elsevier, vol. 129(S), pages 52-66.
    7. Andreas Chai & Nicholas Rohde & Jacques Silber, 2015. "Measuring The Diversity Of Household Spending Patterns," Journal of Economic Surveys, Wiley Blackwell, vol. 29(3), pages 423-440, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation; causes and consequences of inflation; income elasticity of food demand.;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • D1 - Microeconomics - - Household Behavior

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