Household Consumption

This study examines the effect of inflationary pressures on household consumption expenditure in Nigeria between 1991 and 2024. Using descriptive statistics and the Auto Regressive Distributed Lag (ARDL) approach, the study investigates the roles of
inflation, exchange rate volatility, and unemployment in shaping consumption dynamics. Unit root and diagnostic tests were applied to ensure robustness, while estimations were conducted with Views. The findings reveal that inflation significantly increases household consumption in the short run but exerts no meaningful long-run effect. Exchange rate volatility and unemployment were found to be insignificant in both the short and long run, reflecting the moderating influence of Nigeria’s informal sector. Overall, the results suggest that while households adjust nominal spending upward in response to short-run price shocks, long-run consumption remains resilient to inflationary, exchange rate, and unemployment pressures. The study highlights the
transient nature of inflation’s impact on household welfare in Nigeria.

The board objective of this study is to examine the impact of Value Added Tax on consumption level in Nigeria. Specifically, this study investigated the effects of value added tax on household purchasing decisions and consumption, saving and investment behaviour among households in Nigeria, and poverty levels and household welfare in Nigeria.
The study used a primary data collected from 100 households in Ugbowo Benin-city, Edo State. Various statistical and econometric tool were applied to analyze the data. The results revealed that value-added tax has a negative and statistically significant impact on household purchasing decisions and consumption and saving and investment behaviour among households in Nigeria, but a positive and statistically significant impact on poverty levels and household welfare in Nigeria.
Based on the findings, the study recommended that government should consider reducing VAT rates on essential goods and services to enhance consumer purchasing power and stimulate aggregate demand and policymakers should introduce targeted tax reliefs or exemptions for savings and investment-related products to encourage household financial growth despite VAT pressures.