Middle-class consumption patterns during inflation typically involve a shift towards more essential goods and services. As the cost of living rises due to inflation, middle-class individuals often prioritize necessities such as food, housing, and healthcare, while cutting back on non-essential items like vacations, dining out, and entertainment. Additionally, they may seek out lower-cost alternatives, compare prices more carefully, and delay major purchases.
Inflation significantly reduces discretionary spending for middle-income households as they prioritize essentials like food, housing, and utilities. Many cut back on non-essential expenses such as dining out, vacations, and entertainment, while others opt for cheaper brands or delay large purchases like cars or homes. Some households compensate by taking second jobs or side gigs to manage rising costs. Despite these adjustments, discretionary spending recovery remains slow, with many still focusing on bargain-hunting and frugal habits to cope with persistent high prices
I would see it as a problem of consumption restraint assuming that the prices of goods increase so consumption is expected to decrease and can only be balanced if the level of income increases at a rate close to inflation. In addition, we should also assume that inferior goods, normal goods or luxury goods are consumed, and consider the price elasticities of the goods.