The Effect of Perceived Inflation on Green Purchase Behavior: The Moderated Mediation of Financial Literacy

Abstract

This study aims to investigate the effect of perceived inflation on green purchase behavior in the food industry, and the mediating role of attitude toward green products, in addition to financial literacy as a moderator in explaining green purchase behavior. An exploratory study is conducted to assess the interrelationships between the variables and test criteria for perceived inflation and its effect on green purchase behavior throughout two phases. First, a questionnaire was designed to collect relevant data. Second, Structural Equations Modelling was used to test the direct relationship between perceived inflation and green purchase behavior, test the moderated mediation of attitude and financial literacy on the direct relation. A total of 404 individuals responded to the questionnaire. The analysis was implemented using SPSS AMOS v.24. A crucial finding is that attitude toward green products was found to be a key variable that notably improves the model’s ability to interpret results and draw conclusions, as it significantly enhances the model’s explanatory power. This study offers valuable insights for academics, decision-makers, and consumers interested in green products. It significantly advances our knowledge of inflation’s effect on green purchase behavior, alongside enriching literature from multi-disciplinary perspectives. The current study breaks new ground through its contribution to understanding a topic worth studying like inflation and how it affects green purchase behavior by incorporating marketing, economics, and financial variables. It offers an insightful picture of inflation and its effect on tackling environmental problems by focusing on the moderating mediation of the variables in question.