Empirical Investigation of the Determinants of Household Expenditure in Nigeria: The Role of Income

His research looked on the factors that influence household spending in Nigeria. The precise goals are to figure out how symmetric household income and inflation affect household spending. The variables' data came from the Statistical Bulletin of the Central Bank of Nigeria. The data analysis was based on descriptive statistics, unit root and limits cointegration tests, and the autoregressive distributed lag (ARDL) model. The unit root test revealed that the variables are fractional, with household expenditure and income remaining stationary at their current values while the inflation rate remains stationary at the first difference. The findings of the limits cointegration test revealed a long-run link between household expenditure and household income and inflation. Household income has a considerable positive influence on household expenditure in the long and short run, according to the ARDL estimations. The computed coefficients revealed that the long run influence is greater than the short run effect. This study implies that increasing household income enhances households' purchasing power, resulting in a positive contribution to household consumption. It went on to describe how household income has a big impact on how people spend their money. Inflation, on the other hand, has a negative but minor influence on household spending in the long and short run, according to the findings. The error correction coefficient (-0.5074) has the predicted negative sign and is highly significant at the 1% level, implying that the model can adapt to long term equilibrium at a rate of 50.74 percent. Given the findings, authorities should guarantee that the evaluation of income policy is compatible with the country's economic situation in order to boost household buying power.

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