Determinants of Household Consumption Expenditure in Debremarkos Town, Amhara Region, Ethiopia

Abstract

Household consumption expenditure is the desired amount incurred to meet out their basic needs such as food, clothing, housing, transport, etc to fulfill their day to day life. Household’s decision on how much to consume or save is a microeconomic question as it deals with the individual units of the economy. The main objectives of the research study were to assess and to evaluate consumption expenditure of the households at Debremarkos town in Amhara region of Ethiopia. A total of 100 respondents, were randomly selected to administer the interview schedule for data collection. The data were described using means and histograms .The multiple linear regression model was applied to identify determinants for consumption expenditure of a household. The descriptive result shows minimum monthly consumption level of respondents is 683 Birr and maximum is 16,433 Birr. The mean monthly consumption level is 5777 Birr.  Households expend more for food and next to other basic needs like cloth. The mean consumption value of those who are working in Governmental institutions was less than self-employed households. The econometric model pointed disposable income and family size are directly related to consumption; and saving amount is negatively related with consumption. Disposable income is also found to be most determinant factor to determine household consumption. Finally, the study recommends that a household should practice family planning and aware to develop saving habit rather than spending more to irrelevant activities.