Determinants of consumption expenditure and its share to total income in small farm households in Ikwuano, Abia state Nigeria.

Abstract

Proportion of household consumption spending of incomes of smallholder farmers reviewed with factors determining consumption in Ikwuano Abia State, Nigeria exposed relevant policy issues. A multi-stage random sampling technique guided the selection of a panel of 96 small-scale farmers who supplied cross-sectional and longitudinal information analyzed for this report. Analysis involved frequency distribution of observations, conversion of nominal values of financial variables to real values , expression of real consumption as a proportion of real income, and subjection of consumption model to Ordinary Least Square (OLS) regression analysis. Results showed that food and drinks accounted for 48.7% of the total consumption spending, with consumption spending consuming 40.0%-60.0% of the household income. Per- household-member income (in net farm income plus Off-farm income) highly positively influenced consumption and per- household-member wealth (proxy by per-household-member beginning fortnight period saving) highly negatively determined consumption. Implementation of programmes that enhance per-household-member income and better living standards of the members was therefore recommended.

Keywords: Real Income; Consumption Expenditure; farm household

Global Approaches to Extension Practice Vol. 3 (1) 2007: pp. 1-11