TITLE:
An Econometric Analysis of the Determinants of Private Consumption in Cote d’Ivoire
AUTHORS:
Yaya Keho
KEYWORDS:
Private Consumption, Gross Domestic Product, ARDL, Cote d’Ivoire
JOURNAL NAME:
Theoretical Economics Letters,
Vol.9 No.4,
April
19,
2019
ABSTRACT: This study investigates the determinants of private
consumption expenditure in Cote d’Ivoire using time series data from 1970 to
2016. The Autoregressive Distributed Lags bounds testing approach to
cointegration is employed to depict the presence of a long run relationship
between private consumption and its determinants and an error correction model is
estimated to derive short run dynamics. The
results show the presence of a long run relationship among the selected
variables. In the long run, current income, wealth and government consumption
expenditure play a positive role in determining private consumption, with the
effect of current income being higher. Furthermore, consumption expenditure is
negatively affected by inflation rate and real interest rate on deposits. In
the short run, only income and wealth appear to have positive effects on
private consumption while the effects of government consumption, inflation and
interest rate were found to be insignificant. This study provides evidence for
government to improve the level of private consumption.