Crisis myopia: how systemic uncertainty reverses the logic of saving and consumption

This study examines how systemic uncertainty and income variation influence household saving and consumption behaviour during Lebanon's financial and political crisis. Using a 2024 nationwide survey (n = 482), the study employs principal component analysis and ordinary least squares regression to investigate perceived uncertainty, income variation, and consumption patterns. Results show that higher uncertainty is associated with stronger precautionary saving motives and increased consumption of inferior goods, while luxury and durable goods show no significant relationship. Food and health security are negatively affected, indicating deterioration in basic welfare conditions. Findings suggest that prolonged hyperinflation and institutional collapse weaken long-term financial planning and shift behaviour toward short-term survival strategies. The study contributes to understanding consumer behaviour under systemic crises and highlights the importance of restoring institutional stability and financial credibility.