Purchase Power and Consumption Pattern Change of Society (Analysis of 34 Panel Data in Indonesia)

Abstract

Purchase power and consumption patterns change are important aspects to formulate government policies in economic development. The research objective is to analyze each the magnitude of macroeconomic variables on real household consumption of 34 provinces in Indonesia. The research method used is correlative quantitative research to explore the relationship of facts proposed and then described systematically, factually and accurately about the facts and phenomena, as well as the variables needed for public consumption. The research results show two finding. First, there is a negative and significant relationship between conversion and consumption of Indonesian. The increase in inflation will be responded by a decrease in consumption of Indonesian in 34 provinces during 2016-2018. Second, Per capita income has a negative and significant impact on consumption of Indonesian in 2016-2018. The research recommendation is to promote Indonesian consumption who moves into slowing phase due to a shifting or consumption patterns change.

Keywords: Purchase Power, Consumption Pattern

DOI: 10.7176/JESD/11-2-07

Publication date: January 31^st 2020