Exploring the Lived Experience of Inflation and Economic Strain Among Low-Income Urban Households

Abstract

Economic inflation is a central topic in macroeconomic and microeconomic theory, yet most studies emphasize quantitative indicators and overlook the lived realities of those affected. While much is known about inflation’s impact on aggregate consumption, little is understood about how low-income urban households personally experience and interpret its effects. What remains unclear is how individuals assign meaning to economic hardship and navigate moral and emotional decisions under inflationary pressure. This study applies an interpretative phenomenological approach (IPA) to explore how inflation is experienced as a personal, relational, and existential phenomenon by economically vulnerable populations. Conducted in a densely populated urban area of Central Java, Indonesia, the research involved twelve heads of low-income households (comprising both male and female participants, aged between 28 and 52 years, working primarily in informal sectors such as street vending, motorcycle taxi driving, and domestic services). Using in-depth semi-structured interviews with twelve low-income household heads in an urban Indonesian setting, the study identified four core themes: the struggle to prioritize basic needs, emotional burdens of instability, redefinition of necessities, and perceived disconnect between policy and lived reality. Data were analyzed using thematic reduction and interpretative analysis to uncover essential meanings embedded in participant narratives. The findings reveal that inflation shapes not only financial behavior but also personal identity, emotional well-being, and social perceptions. These insights underscore the need for policy frameworks that consider the subjective and contextual nature of economic experience, and they offer a foundation for future interdisciplinary research into financial vulnerability.