Analysing the effects of inflation on the urban poor households expenditures

The recent inflation which was induced by the increase in the price of petrol and food worldwide has affected many. The poor in the urban areas are usually the most affected as they have very limited access to land and natural resources as their source for subsistence. In this perspective, this paper investigates into the different characteristics of poor urban households and how they can affect the consumers' expenditures on children education, food, housing and utilities. As the dependent variable is dichotomous, i.e. whether they are affected or not, we use logit regression to identify the characteristics that have significant effect on the different types of households' expenditures. Besides logit regression, ANOVA and ANCOVA models were also regressed to capture the indirect effects of the households characteristics on their expenditures. From the various variables that were observed, it is found that the number of school-going children have a very significant effect on the households' education, housing and utility expenditure.