The Impact of Inflation on the Standard of Living: A Case Study of Navrongo in the Upper East Region of Ghana

Abstract

The inflation rate of Ghana still remains high in absolute terms and by comparison with many other countries in the sub-region and the world in general. Inflation is simply the general increase in the level of prices of goods and services in an economy over a period of time. When the general price level grows; each unit of our currency buys less goods or services hence, the need for all to know the exact nature of the relationship that exists between inflation and living standards of people. This paper dealt with the effects of inflation on standard of living in terms of expenses on food and non-food items, income, savings, loan and recreation over the period (2010-2013). A sample of 100 heads of families was taken from Navrongo community in Ghana using stratified sampling. Structured questionnaire and interview schedule were used as tools for collecting data. The data was analysed using descriptive statistics and multiple regression model. From analysis of the data, inflation did highly affect the living standard of the people, compelling them to get loans and to do overtime work to meet their family expenditures. It was also revealed that the standard of living of the people worsen form year to year with 2013 been the lowest due to the high inflation.

Keywords: Inflation, Standard of living, Income, savings, Expenses, Navrongo, Ghana