Long Run Determinants of Private Consumption Spending: Evidence from Nigeria

Joseph Chukwudi Odionye; Okanta Sunday Ukeje

doi:doi:10.11648/j.jbed.20190401.14

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Long Run Determinants of Private Consumption Spending: Evidence from Nigeria

Joseph Chukwudi Odionye, Okanta Sunday Ukeje

Published in Journal of Business and Economic Development (Volume 4, Issue 1)

Received: 8 January 2019 Accepted: 22 February 2019 Published: 20 May 2019

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Abstract

Of great concern to policy makers and researchers are the factors that influence private consumption spending owing to the important role it plays in aggregate demand of a country. Thus, this study investigated the long run determinants of aggregate private consumption spending in Nigeriaover thequarterlyperiodsof 1981 to 2016. The Auto Regressive Distributed Lag Error-correction model (ARDL-ECM) was employed to take care of short-run dynamics. In line with theories, variables included in the model were disposable income, credit facility, financial assets, government expenditure, interest rate and inflation rate. The empirical results showed that in the short run, disposable income, financial assets, interest rate and government expenditure influence private consumption spending while disposable income, financial assets, credit facilities and government expenditures are the major long run determinants of private consumption spending in Nigeria. The result equally showed that disposable income has more impact on consumption spending in the long run than it has in the short run. The policy implication is that policy interventions directed towards these variables are essential to increase spending as a major component of aggregate demand.

Published in	Journal of Business and Economic Development (Volume 4, Issue 1)
DOI	10.11648/j.jbed.20190401.14
Page(s)	23-30
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Private Consumption, ARDL, Financial Assets, ECM, Credit Facility

References

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[6]	Ezeji, C. E. and Ajudua, E. I. (2015). “Determinants of aggregate consumption expenditure in Nigeria.” Journal of Economics and Sustainable Development, 6 (5), 164-169.
[7]	National Bureau of Statistics (2012), Consumption Pattern in Nigeria, 2009/2010, NBS Abuja, Nigeria.
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[11]	Tsenkwo J. B (2011). Testing Nigeria‘s marginal propensity to consume (mpc) within the period 1980 – 2004, journal of innovative research in management and humanities 2(1) 15-25.
[12]	Akekere J. and Yousuo P. O. J (2012) Empirical analysis of change in income on private consumption expenditure in Nigeria. International journal of Academic Research in Business and Social Sciences. , 2(11).
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[14]	Pasaran M. H, Y. Shin & R. Smith (2001), Bound Testing Approaches to the Analysis of Level Relationships. Journal of Applied Economics, 16, 289-326.
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[20]	Sakib- Bin A. (2011). Causal relationship between consumption expenditure and economic growth in Bangladesh”. World journal of social sciences(1) 2,158-169.
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APA Style

Joseph Chukwudi Odionye, Okanta Sunday Ukeje. (2019). Long Run Determinants of Private Consumption Spending: Evidence from Nigeria. Journal of Business and Economic Development, 4(1), 23-30. https://doi.org/10.11648/j.jbed.20190401.14

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ACS Style

Joseph Chukwudi Odionye; Okanta Sunday Ukeje. Long Run Determinants of Private Consumption Spending: Evidence from Nigeria. J. Bus. Econ. Dev. 2019, 4(1), 23-30. doi: 10.11648/j.jbed.20190401.14

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AMA Style

Joseph Chukwudi Odionye, Okanta Sunday Ukeje. Long Run Determinants of Private Consumption Spending: Evidence from Nigeria. J Bus Econ Dev. 2019;4(1):23-30. doi: 10.11648/j.jbed.20190401.14

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@article{10.11648/j.jbed.20190401.14,
  author = {Joseph Chukwudi Odionye and Okanta Sunday Ukeje},
  title = {Long Run Determinants of Private Consumption Spending: Evidence from Nigeria},
  journal = {Journal of Business and Economic Development},
  volume = {4},
  number = {1},
  pages = {23-30},
  doi = {10.11648/j.jbed.20190401.14},
  url = {https://doi.org/10.11648/j.jbed.20190401.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20190401.14},
  abstract = {Of great concern to policy makers and researchers are the factors that influence private consumption spending owing to the important role it plays in aggregate demand of a country. Thus, this study investigated the long run determinants of aggregate private consumption spending in Nigeriaover thequarterlyperiodsof 1981 to 2016. The Auto Regressive Distributed Lag Error-correction model (ARDL-ECM) was employed to take care of short-run dynamics. In line with theories, variables included in the model were disposable income, credit facility, financial assets, government expenditure, interest rate and inflation rate. The empirical results showed that in the short run, disposable income, financial assets, interest rate and government expenditure influence private consumption spending while disposable income, financial assets, credit facilities and government expenditures are the major long run determinants of private consumption spending in Nigeria. The result equally showed that disposable income has more impact on consumption spending in the long run than it has in the short run. The policy implication is that policy interventions directed towards these variables are essential to increase spending as a major component of aggregate demand.},
 year = {2019}
}

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TY  - JOUR
T1  - Long Run Determinants of Private Consumption Spending: Evidence from Nigeria
AU  - Joseph Chukwudi Odionye
AU  - Okanta Sunday Ukeje
Y1  - 2019/05/20
PY  - 2019
N1  - https://doi.org/10.11648/j.jbed.20190401.14
DO  - 10.11648/j.jbed.20190401.14
T2  - Journal of Business and Economic Development
JF  - Journal of Business and Economic Development
JO  - Journal of Business and Economic Development
SP  - 23
EP  - 30
PB  - Science Publishing Group
SN  - 2637-3874
UR  - https://doi.org/10.11648/j.jbed.20190401.14
AB  - Of great concern to policy makers and researchers are the factors that influence private consumption spending owing to the important role it plays in aggregate demand of a country. Thus, this study investigated the long run determinants of aggregate private consumption spending in Nigeriaover thequarterlyperiodsof 1981 to 2016. The Auto Regressive Distributed Lag Error-correction model (ARDL-ECM) was employed to take care of short-run dynamics. In line with theories, variables included in the model were disposable income, credit facility, financial assets, government expenditure, interest rate and inflation rate. The empirical results showed that in the short run, disposable income, financial assets, interest rate and government expenditure influence private consumption spending while disposable income, financial assets, credit facilities and government expenditures are the major long run determinants of private consumption spending in Nigeria. The result equally showed that disposable income has more impact on consumption spending in the long run than it has in the short run. The policy implication is that policy interventions directed towards these variables are essential to increase spending as a major component of aggregate demand.
VL  - 4
IS  - 1
ER  -

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Author Information

Joseph Chukwudi Odionye

Department of Economics, Faculty of Business Administration, AbiaState University, Uturu, Nigeria
Okanta Sunday Ukeje

Department of Banking and Finance, Faculty of Business Administration, AbiaState University, Uturu, Nigeria

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APA Style

Joseph Chukwudi Odionye, Okanta Sunday Ukeje. (2019). Long Run Determinants of Private Consumption Spending: Evidence from Nigeria. Journal of Business and Economic Development, 4(1), 23-30. https://doi.org/10.11648/j.jbed.20190401.14

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ACS Style

Joseph Chukwudi Odionye; Okanta Sunday Ukeje. Long Run Determinants of Private Consumption Spending: Evidence from Nigeria. J. Bus. Econ. Dev. 2019, 4(1), 23-30. doi: 10.11648/j.jbed.20190401.14

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AMA Style

Joseph Chukwudi Odionye, Okanta Sunday Ukeje. Long Run Determinants of Private Consumption Spending: Evidence from Nigeria. J Bus Econ Dev. 2019;4(1):23-30. doi: 10.11648/j.jbed.20190401.14

Copy | Download

@article{10.11648/j.jbed.20190401.14,
  author = {Joseph Chukwudi Odionye and Okanta Sunday Ukeje},
  title = {Long Run Determinants of Private Consumption Spending: Evidence from Nigeria},
  journal = {Journal of Business and Economic Development},
  volume = {4},
  number = {1},
  pages = {23-30},
  doi = {10.11648/j.jbed.20190401.14},
  url = {https://doi.org/10.11648/j.jbed.20190401.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20190401.14},
  abstract = {Of great concern to policy makers and researchers are the factors that influence private consumption spending owing to the important role it plays in aggregate demand of a country. Thus, this study investigated the long run determinants of aggregate private consumption spending in Nigeriaover thequarterlyperiodsof 1981 to 2016. The Auto Regressive Distributed Lag Error-correction model (ARDL-ECM) was employed to take care of short-run dynamics. In line with theories, variables included in the model were disposable income, credit facility, financial assets, government expenditure, interest rate and inflation rate. The empirical results showed that in the short run, disposable income, financial assets, interest rate and government expenditure influence private consumption spending while disposable income, financial assets, credit facilities and government expenditures are the major long run determinants of private consumption spending in Nigeria. The result equally showed that disposable income has more impact on consumption spending in the long run than it has in the short run. The policy implication is that policy interventions directed towards these variables are essential to increase spending as a major component of aggregate demand.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Long Run Determinants of Private Consumption Spending: Evidence from Nigeria
AU  - Joseph Chukwudi Odionye
AU  - Okanta Sunday Ukeje
Y1  - 2019/05/20
PY  - 2019
N1  - https://doi.org/10.11648/j.jbed.20190401.14
DO  - 10.11648/j.jbed.20190401.14
T2  - Journal of Business and Economic Development
JF  - Journal of Business and Economic Development
JO  - Journal of Business and Economic Development
SP  - 23
EP  - 30
PB  - Science Publishing Group
SN  - 2637-3874
UR  - https://doi.org/10.11648/j.jbed.20190401.14
AB  - Of great concern to policy makers and researchers are the factors that influence private consumption spending owing to the important role it plays in aggregate demand of a country. Thus, this study investigated the long run determinants of aggregate private consumption spending in Nigeriaover thequarterlyperiodsof 1981 to 2016. The Auto Regressive Distributed Lag Error-correction model (ARDL-ECM) was employed to take care of short-run dynamics. In line with theories, variables included in the model were disposable income, credit facility, financial assets, government expenditure, interest rate and inflation rate. The empirical results showed that in the short run, disposable income, financial assets, interest rate and government expenditure influence private consumption spending while disposable income, financial assets, credit facilities and government expenditures are the major long run determinants of private consumption spending in Nigeria. The result equally showed that disposable income has more impact on consumption spending in the long run than it has in the short run. The policy implication is that policy interventions directed towards these variables are essential to increase spending as a major component of aggregate demand.
VL  - 4
IS  - 1
ER  -

Copy | Download