Determinants Of Households’ Consumption Expenditure In Guder Town, Toke Kutaye District, West Shoa Zone, Oromia Regional State, Ethiopa

Abstract

Consumption expenditure is one and major component of Gross Domestic Product in Expenditure approach. Even though it is macro variable, it is better to analyze the variable at household level. Therefore, the general objective of this study is to analyze determinants of household consumption expenditure in Gudar town of Toke Kutaye woreda. Specific objectives are to see the trend of consumption expenditure in the study area and to assess the basic factors affecting consumption expenditure. Most studies have been conducted on consumption expenditure considering it at macro level variable and by time series data analysis. Very limited were conducted on household level and hence, the research is intended to fill this gap by using cross sectional data at household level. Mixed research design was employed to reach on final result by using both primary and secondary data type. Primary data was gathered by using structured questionnaire which was translated to Afan Oromo. Gathered data was analyzed by using both descriptive and Econometric models especially multiple linear regression model followed by several tests for assumptions of classical linear regression. The result of the study shows that Among independent variables, age of household, gender of household, education level of household and access to credit are statistically significant at 5% and affecting households’ consumption expenditure negatively. Family size and occupation are also statistically significant at 5% but positively affecting our dependent variable. Income and housing condition are highly statistically significant at 1% and affecting households’ consumption expenditure positively. Finally Recommendations are forwarded based on result of the study. These recommendations include having appropriate credit policy, income generating policy, Education policy and family planning to short