An Analysis of the Determinants of Household Expenditures in Rwanda

  • Aristide Maniriho Unity of Economics and Rural Development, Gembloux Agro-Bio Tech, University of Liège, Gembloux, Belgium; Department of Economics, School of Economics, College of Business and Economics, University of Rwanda, Kigali, Rwanda http://orcid.org/0000-0001-7367-1479
  • Edouard Musabanganji Department of Economics, School of Economics, College of Business and Economics, University of Rwanda, Kigali, Rwanda http://orcid.org/0000-0001-9444-4910
  • Ferdinand Nkikabahizi Department of Economics, School of Economics, College of Business and Economics, University of Rwanda, Kigali, Rwanda http://orcid.org/0000-0003-1497-954X
  • Charles Ruranga Department of Economics, School of Economics, College of Business and Economics, University of Rwanda, Kigali, Rwanda; African Centre of Excellence in Data Science, University of Rwanda, Kigali, Rwanda http://orcid.org/0000-0002-5456-7454
  • Philippe Lebailly Unity of Economics and Rural Development, Gembloux Agro-Bio Tech, University of Liège, Gembloux, Belgium http://orcid.org/0000-0002-9281-7661
Keywords: Household Consumption, Income, Demand, Multivariate Model, Rwanda.

Abstract

Economists use two different approaches, unitary and collective, to analyze household decisions. The unitary approach ignores the differences between single-person and multi-person households, whereas the collective approach states that each person in the household must be characterized by specific preferences. The household’s decisions concern mainly the allocation of their income to current consumption or for savings and future consumer expenditures. This study uses the Comprehensive Food Security and Vulnerability Analysis (CFSVA) data collected from a random sample in 2015 in Rwanda. The ordinary least squares (OLS) method was applied to a linear regression model to estimate the household demand functions (total household consumption expenditures, household food consumption expenditures and household nonfood consumption expenditures). The results show that the socioeconomic characteristics of the household, the possession of productive assets and wealth conditions as well as the household locational controls are among the primary drivers of its consumption expenditures. The findings highlight the policy efforts that improve household human capital (education, health), access to and capitalization of productive assets and financial capital, continuous urbanization of rural areas, and sustained provision of quality infrastructure, to achieve high standards of household welfare.

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Published
2021-06-30
How to Cite
Maniriho, A., Musabanganji, E., Nkikabahizi, F., Ruranga, C., & Lebailly, P. (2021, June 30). An Analysis of the Determinants of Household Expenditures in Rwanda. UKH Journal of Social Sciences, 5(1), 8-17. https://doi.org/https://doi.org/10.25079/ukhjss.v5n1y2021.pp8-17
Section
Research Articles