Volume 4, Issue 1, March 2019, Page: 23-30
Long Run Determinants of Private Consumption Spending: Evidence from Nigeria
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
Received: Jan. 8, 2019;       Accepted: Feb. 22, 2019;       Published: May 20, 2019
DOI: 10.11648/j.jbed.20190401.14      View  40      Downloads  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.
Keywords
Private Consumption, ARDL, Financial Assets, ECM, Credit Facility
To cite this article
Joseph Chukwudi Odionye, Okanta Sunday Ukeje, Long Run Determinants of Private Consumption Spending: Evidence from Nigeria, Journal of Business and Economic Development. Vol. 4, No. 1, 2019, pp. 23-30. doi: 10.11648/j.jbed.20190401.14
Copyright
Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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