It uses four rounds of data from the consumer expenditure survey 50th. It also estimates the models for both rural and urban areas separately to examine the regional gaps for the entire distribution of consumption expenditure. According to marshall, it is the process through which human wants are satisfied, and according to adam smith consumption is the object of production. Real income is the basic factor which determines communitys propensity to consume. Determinants of households expenditure in basic education in colombia a thesis submitted to the faculty of the graduate school of arts and sciences of georgetown university in partial fulfillment of the requirements for the degree of master of public policy in public policy by ana maria rojas villamil, b. There are basically two approaches in modelling determinants of poverty. Some of the more important consumption expenditures determinants are interest rates, consumer confidence, wealth, and taxes. The determinants are as follows 1 current disposable income 2 relative income 3 life cycle income 4 wealth 5 price level 6. Given this background, the present study tries to fill the gap in literature and analyzes the determinants of health expenditure with existing theoretical background by considering the case of india and its states. Government expenditure is a very instrumental demand tool in achieving economic stability and policy makers frequently use it to influence certain economic outcomes. Interest in understanding tourists spending behaviour and determinants has risen remarkably see abbruzzo, brida, and scuderi, 2014 and for scholars, it is extremely significant to recognise which factors influence tourist consumption decisions and to measure the effect of these factors on their expenditure using suitable econometric tools. The study examined the determinants of aggregate consumption expenditure in nigerian. Theoretical framework the determinants of consumption expenditure have influenced economists, such as keynes 1936, duesenberry 1949, friedman 1957 and ando and modigliani 1963, to study factors that are both quantitative and qualitative variables, such as income, wealth, interest rate, capital gain and liquid assets, which can. Determinants of household alcohol and tobacco expenditures in.
Based on a richer model in terms of explanatory variables but with fewer countries, grubaugh and santerre 1994 also find that there is a positive impact on health as measured by infant mortality rates. For the full collection of economics essays, share your notes and join us as a member today. Aggregate expenditures determinants can trigger either an increase or a decrease in aggregate expenditures. Analysis of the determinants of food expenditure patterns. Determinants of aggregate consumption expenditure in nigeria. Determinants of optimal expenditure on infrastructure, human resources, and public consumption goods rpo 67766. The aim of the study was to establish the economic, structural and political and institutional determinants of government consumption expenditure in kenya. According to marshall, it is the process through which human wants are satisfied, and according.
We plan to study how consumption of different goods such as food, education, health, house services. This paper investigates the determinants of household consumption expenditure in turkey. Keynes 1936 defined autonomous consumption as that part of consumption spending that is independent from the level of income and reflects the influence of the nonincome determinants on consumption expenditure. Determinants of government consumption expenditure in developing countries. Assuming a constant aggregate income, an increase in the volume of wealth would lead to an increase in consumptionthereby shifting the consumption function upwards and the saving function downwards.
Household and individual consumption decisions under extreme poverty 1. Determinants of health outcomes in industrialised countries 57 oecd 2000 outcomes. The author in 4, defin ed consumption as the part of. Government expenditure majorly consists of two components.
Participation in tourism consumption and the intensity of participation. Per capita consumption expenditure of animalsource food and share of animalsource food in the food budget by region, 1996 to 2011, etb 12 table 4. Consumer spending is what households buy to fulfill everyday needs. The proportion of household expenditure on food is usually very significant and can be used in assessing general household consumption. Pdf the determinants of household consumption and poverty. Abstractthis paper investigated the determinants of farm household food expenditure and its implications for food security in rural nigeria. Consumption refers to the utilisation of goods and services for the satisfaction of human wants. This paper gauges the key determinants of chinas private consumption in. Determinants of government expenditure the subject of government expenditures has not received much or satisfactory attention from economists or students of public finance. In order to fully understand the consumption function, we need to understand a few ideas about household income and how they choose to use that income. The study was funded by the banks research support budget under the research project enhancing urban productivity. Kostakis 2014 investigates the determinants of household. One of the important tools of the keynesian economics is the consumption function.
Analysis what is consumption expenditure determinants induced consumption autonomous consumption introduction consumption expenditure is the expenditure made by households on goods and services types of consumption induced consumption dependent on disposable income autonomous consumption independent on. Research household and individual consumption decisions under. Using this approach arneberg and pederson 2001 report that household characteristics and. Determinants of aggregate consumption expenditure in. Pdf macroeconomic determinants of household consumption. The things we buy every day create the demand that keeps companies profitable and hiring new workers. The population and the education level of population are also significant demographic factors that influence consumer spending and household spending on. The empirical model includes income, a proxy for the cost of consumption, and the exchange rate. The consumption function the consumption function is an equation describing how a households level of consumption varies with its disposable income. The model used in the study was derived from the keynesian consumption function where consumption is explained by variations in income, c fy. Macroeconomic determinants of household consumption.
Determinants of private consumption in developing countries. Induced consumption is consumption that is dependent on disposable income. Secondary data from the harmonized nigeria living standard survey hnlss of 200910 was utilized. But, if one of the subjective, objective or other determinants change then consumption function and saving function would shift. Determinants of backpackers expenditure sciencedirect. Determinants of consumption consumption refers to the utilisation of goods and services for the satisfaction of human wants. An increase in consumption is illustrated by an upward shift of the consumption line. The empirical model includes income, a proxy for the cost of. Incomes and prices are seen as consumptions two major determinants. Data collected on 214 households from benue state were analysed using multiple utility level engel function.
Determinants of food consumption expenditure in ethiopia seid. Introduction the aim of the proposed research is to study consumption patterns among households in extreme poverty. Pdf determinants of government consumption expenditure. Pdf determinants of total consumption expenditure in sudan. Likewise, if income of family b which is having consumption expenditure y 2 b at income level y 2, rises to y 3, its consumption expenditure will increase to y 3 b where b lies on the same ray from the origin as b. Pdf the objective of this paper is to examine empirically the determinants of total consumption expenditure in sudan over the period. The undergo rapid changes and bring market in the consumption function. The consumption function, its technical attributes, its importance and its subjective and objective determinants along with keyness psychological law of consumption.
Determinantsfactors of the consumption function subjective. The determinants of households food consumption 18 from a microeconomic perspective, several studies have been conducted on various determinants of food expenditures such as socioeconomic and demographic factors jae et al. The sample period consists of annual time series from. However barro and salaimartin 1992 classify public expenditure as productive and unproductive and hypothesized that productive expenditure such as expenditure on education, health, road, e.
Government consumption expenditures and the current account. Consumption and macroeconomic policies, evidence of asymmetry in developing countries by magda kandil, and ida aghdas mirzaie paper examines determinants of private consumption in a sample of developing countries. Mostly importantly, the study also calculates elasiticties parameters for the. This pdf is a selection from an outofprint volume from the national bureau of economic research volume title. The exhibit to the right presents the aggregate expenditures line, labeled ae. Quantile regression is used to examine the correlates of consumption at different point.
This study used a multivariate cointegration approach to analyse the macroeconomic determinants of household consumption expenditure in ghana. Per capita consumption expenditure and share of animalsource food by residence, 1996 to 2011. Due to the complexity in the interplay of the household sociodemographic and economic factors in these countries, the effectiveness of pricerelated intervention tends to be limited in scope. Determinants of public expenditure on infrastructure. It can hardly be said that he who wishes to study the subject finds the tools of analysis necessary for the interpretation of public expenditure data lying ready to hand. In kenya, where 60 to 80% of the urban residents live in informal settlements frequently referred to as slums, outofpocket oop payments account for more than a third of national health expenditures. Consists of consumption expenditures, planned investment expenditures, government expenditures, and foreign purchases. Pdf determinants of household consumption expenditure in. Introduction to a theory of the consumption function. Determinants of catastrophic health expenditure in nigeria. As expected, one of the most important determinants of the.
Determinants of public expenditure on health in india. Catastrophic health expenditure and its determinants in kenya. Consumption expenditure is the expenditure made by households on goods and services. Engel further noted that there is also a higher propensity of. This private consumption includes both goods and services. Determinants of government consumption expenditure in. The study investigated the determinants of aggregate consumption expenditure in nigeria using time series data from 1981 to 2015. May 06, 2017 for the full collection of economics essays, share your notes and join us as a member today.
Based on a richer model in terms of explanatory variables but with fewer countries, grubaugh and santerre 1994 also find that there is a positive impact on health as measured by infant mortality rates of certain health inputs, such as the. Household consumption is generally considered to be the. This study uses the 200405 household income and consumption expenditure survey to examine the determinants of household teff expenditures by using heteroskedastic doublehurdle model to accommodate zero observations in the sample. Figures 1a and 1b indicate that the latter component has represented a quantitatively relevant share. The study assessed the determinants of catastrophic health expenditure among households in nigeria.
Aggregate expenditure ae total spending in the economy on final goods and services. Government consumption expenditures and the current. Research household and individual consumption decisions. It was also specified to embrace the postulates of consumption expenditure that are not based. The latter study used household calorie consumption as the dependent variable and a limited number of household characteristics as explanatory variables.
This article examines the determinants of household income among urban and rural. What are the determinants of consumption expenditure in. Pdf determinants of government consumption expenditure in. Analysis what is consumption expenditure determinants induced consumption autonomous consumption introduction consumption expenditure is the expenditure made by households on goods and services types of consumption induced consumption dependent on disposable income. It uses four rounds of data from the consumer expenditure survey 50th, 19931994. Government consumption expenditure consists of two main components. Determinants of government consumption expenditure in kenya. Nigeria consumption expenditure has been on the increase for decades. An empirical study of the determinants of household food. An analysis of the determinants of household consumption. Macroeconomic determinants of household consumption expenditure in ghana.
Consumption expenditures determinants can trigger either an increase or a decrease in consumption and a corresponding decrease and increase in saving. When real income of the community increases, consumption expenditure also increases but by a smaller amount. This again means that the proportion of income devoted to consumption by family b i. If there is unequal distribution of wealth in a country, the consumption function will also be unequal. Due to the complexity in the interplay of the household sociodemographic and economic factors in these countries, the effectiveness of pricerelated intervention tends to be limited in scope and. However, little is known on the extent to which these oop payments are associated with personal or household financial catastrophe in the slums. Empirical studies on the determinants of household consumption and poverty are nonexistent in fiji. Catastrophic health expenditure is a measure of financial risk protection and it is often incurred by households who have to pay out of pocket for health care services that are not affordable. In line with the recommendation by the world health organization who, prices are used as policy instruments in many countries in discouraging the consumption of alcohol and tobacco products. Thus, a better understanding of household consumption expenditure is directly related to poverty by the determinants importance in selecting alternative ways to. Determinants of public health care expenditure in nigeria.
Aggregate expenditures determinants affect the aggregate expenditures line much like any determinants affect a corresponding curvethey cause the curve to shift. This thus is the first study whic h attempt s to model the determinants of pover ty at the. Another recent study on the determinants of poverty in kenya is oyugi 2000, which is an extension to earlier work by greer and thorbecke 1986a,b. Almost twothirds of consumer spending is on services, like real estate. Thus, consumption is among the key determinants of wellbeing of citizens at the global. Determinants of household consumption expenditure in debremarkos town, amhara region, ethiopia. A microeconometric analysis of household consumption. The study revealed that household income is significant in determining food. Incomes and prices are seen as consumption s two major determinants. Jan 25, 2020 consumer spending is what households buy to fulfill everyday needs. Macroeconomic and demographic determinants of household. Larionova procedia economics and finance 24 2015 727 a 733 in the second model the relationship with macroeconomic factors such as.
176 987 939 332 105 305 1204 659 393 593 279 379 711 392 526 1042 368 633 1436 346 958 19 1180 881 1315 480 1427 1161 1283 1388 1155 774 815 715