Determinants Of Household Consumptions Expenditure Allocation. The Case Of Burayu Town

Abstract

The Main Objective of the research was to analyze the determinants of household consumption expenditure allocation in Burayu Town. Household’s decision on how much to consume or save a is micro economic question. To achieve this objective, both descriptive and econometrics model is used in the study. From descriptive, the data was described using means and standard deviations. The seemingly unrelated regression model was applied to identify the determinants of household consumption expenditure allocation of the household. In the study structured questionnaire was collected from 394 household heads, described and regressed using SURE model. Correlation result portrayed that, income, age and sex were found positive with all expenditure allocation categories of households whereas saving, occupation, education level, family size, and marital status were found negative. The households spending allocation were ranged from the smallest spending for Housing and furnishing (ETB8188.746) to the highest food (ETB33899.68) spending. The household consumption expenditure allocation for education and health is ETB11946.52 and for miscellaneous is ETB32603.25. Total expenditure is determined by age, income, consumption expenditure on education and health, and consumption expenditure on food. Income of the household and consumption expenditure on education and health are determinants of consumption expenditure on housing and furniture. Consumption expenditure on education and health is determined by income, total expenditure, consumption expenditure on housing and furniture, and consumption expenditure on food. Income and consumption expenditure on food are determinants of consumption expenditure on miscellaneous. Consumption expenditure on food is determined positively by age, income, and total expenditure, consumption expenditure on education and health and consumption expenditure on miscellaneous. Action targeted that affects total expenditure is effective if households use age, income, consumption expenditure on education and health, and consumption expenditure on food. Achievement targeted that affects consumption expenditure on housing and furniture is advised to use income of the household and consumption expenditure on education and health. Any action targeted that affects consumption expenditure on education and health is positively determined by income, total expenditure, consumption expenditure on housing and furniture, and consumption expenditure on food. Deed targeted that affects consumption expenditure for miscellaneous is determined by income and consumption expenditure on food. These showed that, higher level of household income and higher consumption expenditure on food are related to higher level on spending expenditure of food. Therefore, any action targeted that affects consumption expenditure on food is advised to use age, income, and total expenditure, consumption expenditure on education and health and consumption expenditure on miscellaneous