The Impact of Economic Recession on the Quality of Living and Consumer Buying Decision of Inhabitants in Nigeria
Chapter One
Objectives of the Study
The broad objective of the study is to evaluate the impact of economic recession on the quality of living and consumer buying decision of inhabitants in Nigeria. The specific objectives are as follows:
- To investigate on the possible causes of economic recession in Nigeria.
- To examine the effects of economic recession in Nigeria.
- To examine the relationship between economic recession and adequate quality of living in Nigeria.
- To also examine the relationship between economic recession and consumer buying behavior in Nigeria.
- To examine the relationship between economic recession and labour force in Nigeria.
- To examine possible monetary or fiscal policies to be introduced to improve the quality of living of the people and build up consumer purchasing power.
CHAPTER TWO
LITERATURE REVIEW AND THEORETICAL FRAMEWORK
Introduction
The chapter deals with literature review on the concept of impact of economic recession on the quality of living and consumer buying decision of inhabitants in Nigeria. This involves the various definitions of consumer behaviour, economic recession, consumer behaviour in response to the financial crisis, causes of economic recession in Nigeria family, possible measures to end recession in Nigeria families, the review of empirical studies, theoretical review, theoretical framework and gaps in literature.
Conceptual Review
In this section, the basic relevant concepts were reviewed. These include economic recession, consumer behaviour, among others.
Consumer Behaviour and Consumer Buying Decision Model
Dura (2011) stated that consumer behaviour is the study of the process which individuals, groups, or organsiations carryout to acquire, use, dispose products that satisfy their needs. Zuruwicki & Braidt (2005) opined that consumer buying behaviour is taken as a complex study, simply because it has a wide set of prior and after purchase activities. On daily basis, each of us make different, diverse and numerous decisions about every aspect of product acquisition raging from what type of product to buy and where to buy the product (Adeyanju & Adetunji, 2015).
The buying process consists of five stages, problem recognition or motivation. This problem can be aroused by two major stimuli (internal or external stimulus). The next stage is the information search, which involves the gathering of all possible information that can help in solving the already recognised problem. This search effort can take the form of Heightened attention or Active Information Search. There are various sources of information available to consumers when making buying decisions. These sources are experimental source which refers to the information gathered through the recollection of past experiences or drawn from storage in long-term memory. Another one is Informal sources. These are direct and verbal information gathered from non-formal sources like individuals based on their personal experiences. The last source is commercial sources. These entail advertising; direct marketing activities, personal selling, other promotional activities, mass media, internet among others. All these sources portray the benefits of the product to the consumers (Nawaz, Mohib & Asa, 2012). The next stage is the evaluation of alternatives. It involves a thorough analysis of the information collected at the second stage, about all the product categories and brands. Having evaluated alternatives, consumer will now make a choice. The last stage is the poor purchase evaluation Lelia & Alina (2011) stated that the main changes in the new consumer behaviour as a result of recession could be these following; Desire for simplicity, Smart consumption, Green consumerism, Temperance and Ethical consumerism. Masarrat, Ghazal, Tha & Suchitz (2015) agreed with other researchers that the global recession present changing patterns in consumers buying decisions and marketers should adopt appropriate strategies to facilitate positive buying decisions.
The Consumer Behaviour in Response to the Financial Crisis
The buying patterns of people tend to change during hard and stressful times such as economic crisis (Nistorescu and Silvia, 2009). The consumer reacts to any change in the economic situation around him by changing his consumption. This happens due to a change in the levels of his perception of risk. Financial crisis affects the customers not only economically but also psychologically. People become more money minded. They start to compare different products and select based on price compromising quality (Nistorescu and Silvia, 2009). The buying process in this situation can be transformed from being a programmed behaviour or a limited decision-making buying behaviour to become the extensive decision-making buying behaviour i.e. the buying behaviour before the crisis was not based on extensive decision making and information gathering but after the crisis the process became more complicated. Growing unemployment, increasing inflation, “freezing” or even decreasing of wages, the decreasing of purchasing power, bad economic situation are facts that affect the consumers in almost all national markets. As long as people are reading more about economic crisis and as long as the press is focusing in reflecting the crisis effects, there is a psychological effect with negative impact on consumers (Amalia and Ionut, 2009). The influence of the crisis on people can be reflected on their consumption.
CHAPTER THREE
RESEAERCH METHODOLOGY
Introduction
This chapter deals with the research methodology. It is segmented thus: research design, population of the study, sample size and sampling technique, sources of data collection, instruments of data collection, validity and reliability of instrument and Method of data analysis.
Research Design
The research design used for this study is survey. The survey design was used to explain, explore and describe the variables. It was used to explore and describe the relationship between economic recession and quality of living using the data collected from the field survey. It is used as an assessment tool to provide information on which to base sound decisions. It also serves as a foundation for more investigation. The data gathered in a survey are usually answers to predetermined questions that are asked of respondents. This research method was adopted because it offers opportunity for the collation of facts and information from a wide spectrum of respondents without much expense, hence it is expedient for this research. The method is expected to obtain information about people’s opinion, attitudes and experiences that are difficult to observe directly.
Population of the Study
The population of the study consists of people living, studying, and working within the three main regions (south-east, south-west, and North) of Nigeria. The choice of this population was informed by the nature of their stay in Nigeria and constitute consumers in the country.
CHAPTER FOUR
RESULTS AND DISCUSSION
Introduction
This chapter deals mainly on data presentation, interpretation and analysis of data collected through questionnaires collected from the respondents. The chapter will also discourse the findings of the results. These will be systematically arranged and analysed for comprehensive interpretation and making reliable conclusions.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Introduction
This chapter deals with the summary of this study, conclusions from the findings and recommendations which can be used for policy making.
Summary
This study assesses the impact of economic recession on the quality of living and consumer buying decision of inhabitants in Nigeria. The study is in five chapters. In the first chapter, a general background of the study was undertaken. In view of the background, the problems of study were identified and stated, the research questions, the objective, scope, justification and significant of the study were outline and discussed.
Chapter two was divided into three parts- the conceptual, theoretical and empirical literatures. The conceptual framework, reviewed the concept consumer behaviour, economic recession, consumer behaviour in response to the financial crisis, causes of economic recession in Nigeria family, possible measures to end recession in Nigeria families. From the conceptual review, it was found that economic recession has a negative impact on consumers. The second part of chapter two, the theoretical framework, reviewed the major theories of consumer behaviour and economic recession. The reviewed theories differed in many respects but they also have areas where they overlapped. However, this study found more evidence in support of the Hierarchy of Effect Theory and as such adopted the Hierarchy of Effect Theory to guide the study. The last part of chapter two, the empirical literature, concentrated on previous studies, their methodologies and their findings in a related topic. From the empirical reviewed, it was found that several methodologies were used in most studies. There was also a substantial difference between the findings of the studies.
In the third chapter of this work, the research design, population of study, sample size, sampling techniques, instrument for data collection, method of data collection, validity/reliability of instrument and method of data analysis were all discussed.
In the fourth chapter, data collected (primary) were presented and analysed to answer the research questions. Based on the various findings, the six questions were answered. After the analysis, the findings are as follows:
- There are several causes of economic recession in Nigeria such as high inflation, high interest rate, accumulated debt.
- Economic recession in Nigeria have negative effect on quality of living, consumer buying behaviour, labour force.
- Monetary or fiscal policies can be introduced to improve the quality of living of the people and build up consumer purchasing power.
Conclusion
This study has underscored the impact of economic recession on the quality of living and consumer buying decision of inhabitants in Nigeria. Findings from this research uncovered that monetary or fiscal policies are an effective tool for reducing or curbing economic recession in the country. This result reinforces the study carried out by Ezeanyeji, Chika and Ifeako (2019) which revealed negative impact of recession on economic growth in Nigeria and on the lives of Nigerians. It also brings out the deeper structural problems inherent in the Nigerian economy and proffer solutions to pull Nigeria out of the recession. This was further reiterated in the findings of Oyewole and Olaniyi (2017); the research findings showed that the economic recession highly affected Nigeria’s socio-economic lives.
The findings of this study have clearly shown that monetary and fiscal policies are a work activity that can make a very significant contribution to the overall effectiveness and profitability of an economy. Thus, government should implement policies that can boost the economy.
Recommendations
On the strength of the observations and findings made in this study the following recommendations have been made.
- Inflation rate and interest rate should be reduced; debt should be repaid or reduced.
- Effective spending should be implemented to boost the economy and raise consumer spending power.
- Empowerment initiatives and employment should be created so as to help the masses; correct policies should be rightly implemented.
Limitations to the Study
In the course of carrying out this study, a number of limitations were encountered. Notable among them was the constraint encountered in sourcing for information. The challenge stemmed from the northern region where vital information on the study also resides. The people where not willing to release information to researchers. This situation was resolved by efforts made by the researcher who persuaded them.
Secondly, the constraint of literature on impact of economic recession on the quality of living and consumer buying decision, the researcher visited different libraries to search of suitable publications on impact of economic recession on the quality of living and consumer buying decision and continuous sourcing of internet materials.
Finally, the unwillingness of the respondents to fill the questionnaire resulted to delay in collecting the questionnaires. However, an appeal convinced the respondents of the need to respond to the questionnaires. The scope of the study was another limitation to the study. The study is narrow in scope as it does not include other effects of economic recession such as education, income. The study only covers impact of economic recession as regards to quality of living, labour force and consumer buying decision. However, these limitations did not affect the objective and quality of the study since information obtained from the questionnaires as well as existing studies on impact of economic recession were utilised in the study.
Suggestions for Further Studies
The fact that this study is one of the recent attempts to economic recession and quality of living/consumer buying decision does not suggest the completeness of the research in this area. Further research may have explored the possibility using a different methodology, possibly the Pearson correlation, to find out if the result will agree or disagreed with the findings of this study. It may also be of interest to extend the scope of this study backward and beyond. In addition, future studies may find it worthwhile to consider the influence of economic recession on education.
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