Abstract
Household consumption and the variables driving it have garnered extensive attention in economic literature. GDP per capita, gross savings, and inflation are among the macroeconomic variables typically considered to affect household spending. The paper examines the effect of these macroeconomic variables on household consumption using the ARDL model. The yearly aggregate data utilized in this analysis spans the period from 1983 to 2018. The paper found a long-run negative relation between household final consumption expenditure and gross domestic saving in the long run. The study showed positive and significant long-run relationships between GDP per capita and household consumption and a significant and negative relationship between savings and household consumption both in the short and long runs.
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