Journal of Economics Theory

Year: 2019
Volume: 13
Issue: 3
Page No. 13 - 18

Determinants of Households Consumption Expenditures; A Panel Data Analysis of 12 West Africa Countries

Authors : Idowu James Fasakin and Kabir Kayode Salman

Abstract: Household consumption expenditure consists of all the expenditures incurred by resident households on individual consumption of goods and services, including those sold at prices that are not economically significant. The poor consumption pattern and high poverty rate in developing countries, especially, West-Africa is a global concern. Hence, this study examined the determinants of Households Consumption Expenditures (HCE) in 15 West-Africa countries using fixed and random effects to compare the estimates. Data were obtained from the World Development Indicators (WDI) and FAO STAT and cover the period of 1995-2015. Results showed that Guinea Bissau have the highest mean consumption expenditure with Gabon the lowest, while Nigeria have the highest Gross Domestic Product (GDP) with Gambia the lowest. Estimates from the analysis indicated that the coefficients of total life expectancy and Gross national expenditure were significant at 1% (p>0.001) while the coefficient of health expenditure was significant at 5% (p>0.05) under fixed and random effects. The negative coefficients of Gross Domestic Product (GDP) showed that consumption power of individual households is not influenced or determined by the GDP of the country. The R2 of 0.7071 signifies that 70.71% of the total variation in consumption expenditure was explained by the variables under consideration. It is therefore recommended that West African countries should create an enabling environment to the citizenry, so as to enhance more productiveness and engaging the idle hands, so as to increase the Gross Domestic Product (GDP).

How to cite this article:

Idowu James Fasakin and Kabir Kayode Salman, 2019. Determinants of Households Consumption Expenditures; A Panel Data Analysis of 12 West Africa Countries. Journal of Economics Theory, 13: 13-18.

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