WELFARE IMPLICATION OF DETERMINANTS AFFECTING AGGREGATE CONSUMPTION EXPENDITURE

  • Type: Project
  • Department: Economics
  • Project ID: ECO0600
  • Access Fee: ₦5,000 ($14)
  • Pages: 70 Pages
  • Format: Microsoft Word
  • Views: 651
  • Report This work

For more Info, call us on
+234 8130 686 500
or
+234 8093 423 853

ABSTRACT:

The research on welfare implication of determinants affecting aggregate consumption expenditure was

conducted by taking Rwanda as an area of study, period 1995- 2015. The researcher’s main purpose was

to evaluate the impact of gross domestic product, lending interest rate, inflation rate and exchange rate

on consumption expenditure in economy. To achieve the desired objectives, the researcher analyzed

how independent variables of the Gross consumption expenditure (GDP, Lending Interest rate, Inflation

rate and Exchange Rate) work and how they affect the dependent variable (GCE). Augmented DickeyFuller

(ADF) and Phillips- Peron (PP) tests were used for stationarity test. Engle- Granger two steps

procedure and the Johansen Maximum Likelihood Methodology were used to see whether variables are

co-integrated or not. The series analysis was done using Eviews 8 Software. Those tests revealed that

there is co-integration among variables. The researcher found that the economic authorities in Rwanda

use different tools of monetary policy and fiscal policy in order to stabilize the economy, using

determinants such as: money supply, government spending, credit control, interest rates and other

monetary and fiscal measures can be manipulated by the economic authorities of Rwanda to maintain

welfare of the society.

Keywords:

Gross consumption expenditure(GCE), Inflation rate measured by Consumer Price Indices(CPI),

Exchange rate, Lending interest rate, , Gross domestic product(GDP).

x

LIST 

TABLE OF CONTENTS

APPROVAL .............................................................................................................................. iv

LIST OF TABLES ..................................................................................................................... x

LIST OF FIGURES .................................................................................................................. xi

GENERAL INTRODUCTION................................................................................................. 1

1.Background of the study ........................................................................................................... 1

2.Significance of the study........................................................................................................... 2

3.Scope and period of the study................................................................................................... 3

4.Problem statement..................................................................................................................... 3

5.Hypothesis................................................................................................................................. 5

6.Objectives of the study.............................................................................................................. 6

6.1General objectives................................................................................................................... 6

6.2Specific objectives .................................................................................................................. 6

7.Research methodology.............................................................................................................. 6

7.1Techniques.............................................................................................................................. 6

7.1.a. Documentary technique...................................................................................................... 7

7.1.b. Interview technique............................................................................................................ 7

7.2 Methods.................................................................................................................................. 7

7.2.a. Statistical method .............................................................................................................. 7

7.2.b. Analytical method .............................................................................................................. 7

7.2.c Historical method ................................................................................................................ 8

7.2.d Comparative method........................................................................................................... 8

7.2.e. Econometric method .......................................................................................................... 8

8. Organization of the study......................................................................................................... 8

CHAP I: REVIEW OF LITERATURE................................................................................... 9

INTRODUCTION ....................................................................................................................... 9

Definition of the key concepts..................................................................................................... 9

1.1 Welfare:.................................................................................................................................. 9

1.1.a. The Genesis of the Welfare State....................................................................................... 9

1.2 Consumption ........................................................................................................................ 10

1.2. a. Autonomous consumption............................................................................................... 11

xiii

1.2. b. Marginal propensity to consume..................................................................................... 11

1.2. c Disposable income ........................................................................................................... 12

1.3 National income ................................................................................................................... 13

1.3.a. Definitions of National Income:....................................................................................... 13

1.3.b Concepts of National Income:........................................................................................... 16

1.4 Interest rate........................................................................................................................... 19

1.4. a. Nominal Interest Rate...................................................................................................... 19

1.4.b Real Interest Rate .............................................................................................................. 20

1.4. c Effective interest rate ....................................................................................................... 20

1.5. Inflation rate........................................................................................................................ 20

1.5.1. Causes of inflation ........................................................................................................... 21

1.5.1.a. The cost push-inflation (On the supply side) ............................................................... 21

1.5.1. b Demand-Pull Inflation (On the demand side)............................................................... 22

1.5.2 Keynesian inflation theory................................................................................................ 23

1.6. Exchange rates .................................................................................................................... 24

1.6. a. Nominal exchange rate (e) .............................................................................................. 24

1.6.b. Real exchange rate (ε)...................................................................................................... 24

CHAPTER 2 ANALYSIS OF THE STATUS AND TRENDS OF DETERMINANTS .... 27

INTRODUCTION ..................................................................................................................... 27

2.1. Evolution of gross consumption expenditure in Rwanda 1995-2015 ................................. 27

CHAPTER 3 ECONOMETRIC ANALYSIS OF THE RELATIONSHIP OF ................. 35

INTRODUCTION ..................................................................................................................... 35

3.1 Model specification.............................................................................................................. 35

3.1.1 Hypothesis of the model ................................................................................................... 36

3.1.2. Expected signs.................................................................................................................. 37

3.1.3 Test and analysis of the data ............................................................................................. 37

3.2. Data processing................................................................................................................... 37

3.2.1. Unit root tests................................................................................................................... 37

3.2.1.a. Why testing stationarity?............................................................................................... 37

3.2.1.b. Interpretation of stationarity test.................................................................................. 53

3.3 Estimation of long run model............................................................................................... 53

xiv

3.3.1 Co-integration test............................................................................................................. 53

3.3.2 Interpretation of Johansen Co-integration test output....................................................... 55

3.3.3 Long run output................................................................................................................. 56

3.4 DIAGNOSTIC TESTS ........................................................................................................ 58

3.4.1 Jarque-bera test (Normality test)....................................................................................... 59

3.4.2 Breusch-Godfrey test (Serial correlation LM test) ........................................................... 60

3.4.3 Heteroscedasticity Test (Breusch Pagan Godfrey) ........................................................... 60

3.5 STABILITY TESTS ............................................................................................................ 61

3.5.1 Ramsey reset test............................................................................................................... 61

3.5.2 Recursive estimates (OLS only): Cusum test ................................................................... 61

CONCLUSION………………………………………………………………………………...64

SUGGESTIONS ........................................................................................................................ 64

REFERENCES………………………………………………………………………………...66

APPENDICES ........................................................................................................................... 68

APPENDICES I......................................................................................................................... 69

APPENDICES II........................................................................................................................ 7

WELFARE IMPLICATION OF DETERMINANTS AFFECTING AGGREGATE CONSUMPTION EXPENDITURE
For more Info, call us on
+234 8130 686 500
or
+234 8093 423 853

Share This
  • Type: Project
  • Department: Economics
  • Project ID: ECO0600
  • Access Fee: ₦5,000 ($14)
  • Pages: 70 Pages
  • Format: Microsoft Word
  • Views: 651
Payment Instruction
Bank payment for Nigerians, Make a payment of ₦ 5,000 to

Bank GTBANK
gtbank
Account Name Obiaks Business Venture
Account Number 0211074565

Bitcoin: Make a payment of 0.0005 to

Bitcoin(Btc)

btc wallet
Copy to clipboard Copy text

500
Leave a comment...

    Details

    Type Project
    Department Economics
    Project ID ECO0600
    Fee ₦5,000 ($14)
    No of Pages 70 Pages
    Format Microsoft Word

    Related Works

    ABSTRACT  The aim of this study is to empirically analyze the impact petroleum subsidy has had on petroleum products consumption in Nigeria over the period (1980-2010). Subsidy has been defined as a sum of money granted from public fund to help an industry or business keep the price of a commodity or service low. There have been a lot of... Continue Reading
    1975 – 2005 ABSTRACT The research seeks to test impact of fiscal policy on public consumption and expenditure in Nigeria 1975-2005. Government consumption and expenditure variables used, already divided the interest of total debt and total revenue.... Continue Reading
    Abstract This research work studies the gross national income on consumption expenditure of the federal republic of Nigeria from 1992 – 2011 It is aimed at fitting a prediction equation for gross national income over consumption expenditure, gross national income over time, to forecast the future national income and to test significant... Continue Reading
    CHAPTER ONE INTRODUCTION BACKGROUND OF THE STUDY The existence of conflict in Nigeria industrial organisation can no longer be treated with disdain, neither can students suppress it. This project is concerned with understanding the role and practices of industrial relation... Continue Reading
    ABSTRACT This project focused on the analysis and interpretation of data collected to explain the determinants and development implication of unemployment in Nigeria. This analysis finds to determine the econometric effect of some explanatory variables such as demand for unemployment, supply of unemployment, population, inflation on the... Continue Reading
    ABSTRACT This project focused on the analysis and interpretation of data collected to explain the determinants and development implication of unemployment in Nigeria. This analysis finds to determine the econometric effect of some explanatory variables such as demand for unemployment, supply of unemployment, population, inflation on the... Continue Reading
    ABSTRACT In the sense that the materials involved in this project were capital intensive more especially cement, so in carrying out the work one must intensive to be careful in the selection and collection of materials to be used in the casting of the concrete. The materials used are coarse aggregate (granite) fine aggregate (sand). The coarse... Continue Reading
    ABSTRACT In the sense that the materials involved in this project were capital intensive more especially cement, so in carrying out the work one must have to be careful in the selection and collection of materials to be used in the casting of the concrete. The materials used are coarse aggregate... Continue Reading
    ABSTRACT The current extensive use of low quality aggregate in Nigerian road for engineering applications is of concern because their appear to be a level of ignorance surrounding their existing properties and implications. This project was conceived for the purpose of comparing the crushed aggregate deposits in Isi-Agu Abia State and mac-Daniels... Continue Reading
    CHAPTER ONE 1.1 GENERAL INTRODUCTION The relevance of road to life and its activities cannot be over emphasized. Road is as old as the origin of man and plays a vital role in the life of the people in communities, states, countries. It is quite obvious that life would have been very difficult... Continue Reading
    Call Us
    Get this work
    whatsappWhatsApp Us