Abstract:
This study was carried out to examine the determinants of the cost of living at Household level in case of Ambo town, Oromia region, Ethiopia. This study was based on a qualitative and quantitative research method, using the descriptive survey design and Inferential statistics, to depict the participants in an accurate way. Information was collected using a questionnaire distributed to the sample of 265 respondents, randomly selected from the three kebeles identified purposively. The collected data was critically analyzed for easy evaluation and presentation, using means, standard deviations and percentages for descriptive analysis. The Tobit model was used to analyze determinants by using Index of Cost of living. The result depicts that Age of households, Income level, Utilities expenses, Different forms of taxes, Family size of households, policy related problems and Inflation were positively affecting cost of living at household level and statistically significant variables at less than 1% level of significance. Another variable such as food expenses, transportation, energy and health services were also significantly affecting cost of living at household level. The study recommends that concerned body including government should provide strategies that will sustain manageable cost of living
