Coping with inflation in urban area

Abstract

The study was carried out at ten selected low cost housing and resettlement areas in Kuching. The respondents were selected based on the total household income of not more than RM1500 per month. A total of 219 respondents were selected and interviewed using a structured questionnaire. Most of the respondents were non-fixed income workers (53%) while the remaining 46.1 % had fixed income. About 37.4 % of the respondents worked in the private sector, 32 % were self-employed, 24.2 % government employees, and 6.4 % unemployed. The findings showed that the lower income households in the urban areas were the most affected group during inflation. The high cost of living in the city, coupled with inflation, had been found to affect them seriously. There was a similarity in the coping behavior of the low income households to inflation. This could be due to the homogeneity in the respondents' socio-economic background. They had very few options, and most had to cut down on their expenses as the resources available to increase their income was rather limited. One of the most common strategies adopted to cope with inflation was to take up extra employment (43.40 %) and withdraw past savings (32.90 %). They also had resorted to buying cheaper alternatives (87.20 %), cutting on other expenditure (82.60 %) and consuming lesser amounts of the items (81.70 %). Nevertheless, there was no marked difference in the lifestyle and strategies adopted in terms of the different income levels among those in the low income households to cope with inflation. The study revealed that the most common strategy by households with income below RM500 per month was to consume lesser amount of the products. Meanwhile, those with the income bracket of RM500 to RM1099 resorted to buying cheaper alternatives and consuming fewer amounts of the products (89.00 %). Similarly, households with an income bracket between RM1100 to RM1500 also preferred buying cheaper alternatives and consuming lesser amounts of the products (35.16 %) as a means to cope with inflation.