Determinants of Consumption Expenditure in Ekiti State

Abstract

The purpose of this paper is to see if really the basic hypothesis of the Keynesian theory of the consumption function works in Ekiti State of Nigeria. In doing this, the study tried to examine whether income has any relationship with the private consumption expenditure of the people of Ekiti State and whether family size, price and taste have any effect on the inhabitants of the state’s consumption expenditure. In the course of this paper, primary data was used; questionnaires were administered to a representative segment of Ekiti state. For this purpose, the chi-square (x2) analysis was employed to test the hypothesis. The result showed that income was significant in the determination of consumption expenditure in Ekiti state. It was recommended that since income was found to have a positive significant influence on the consumption expenditure of Ekiti people, any government policy that increase income will therefore have a positive influence on the aggregate demand of the people, this will have multiplying effects on the economic activity of the state.