The Impact of Income Fluctuations on Consumer Purchasing Behavior in Sri Lanka – A Systematic Literature Review

Abstract

Income fluctuations are common while having a significant influence on consumer behavior, financial stability and socioeconomic progress in developing countries. Despite its significance, the relationship between income fluctuations and consumer behavior in Sri Lanka is still insufficiently explored as existing studies often focus on sector–specific contexts and consists of out–dated data and inadequate analytical techniques. The originality of this work lies in its multidisciplinary approach that focuses on geographic and demographic variations and its consideration of both formal and informal income patterns while contextualizing consumer behavior around recent macroeconomic shocks such as 2022 economic crisis. The methodology used in this paper is systematic literature review using a sample of 55 publications published in the period of 2000 – 2025 in this context. The findings of the study suggest that Sri Lankan consumers show immediate responses to the income fluctuations, but the logical spending changes are moderated by cultural and Behavioral factors such as prestige consumption and community obligations. The study recommends policymakers to enhance societal safeguard measures, promoting informal income resilience and establishing financial literacy among consumers. Businesses are recommended to address the dynamics of consumer behavior immediately and offer affordable value proposition while establishing brand loyalty and trust.

        Keywords: income fluctuations, consumer behavior, informal income, socioeconomic impact