Assessing the Effect of Non-Monetary Factors on Price Stability in Choma District of Zambia

Price stability is essential for economic growth, influencing consumer confidence, investment behaviour, and financial system efficiency. The aim of the study was to assess the effect of non-monetary factors on the price stability in Choma district. The research was guided by two key objectives: to identify non-monetary factors affecting pricing, and analyse business owners’ perceptions of monetary policy effectiveness. A mixed method design was adopted, targeting five commercial banks, two micro-lending institutions, and four categories of business owners. The findings revealed that Non-monetary factors shaped pricing outcomes. Supply chain disruptions (p = 0.013) and responsiveness to government policies (p = 0.000) emerged as highly significant influences on pricing strategies. Moreover, 60% of business owners who closely tracked monetary policy developments indicated they adjusted their pricing expectations accordingly. The Chi-square test confirmed significant associations between tracking monetary policy, pricing adjustments (p = 0.021), and demand for greater engagement with monetary authorities (p = 0.000). The study recommends enhanced consultation with monetary authorities, improved financial literacy among business owners, adoption of flexible pricing strategies, and greater responsiveness to both monetary and non-monetary factors affecting price stability.