Empirical analysis of the impact of inflation on household consumption expenditure in Nigeria
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Abstract
Despite government's monetary policies, high inflation continues to pose a negative impact on household well-being in Nigeria. Consequently, this study examines the impact of inflation on household consumption expenditure in Nigeria from1981to 2020 using the Autoregressive Distributed Lag Model (ARDL).The findings of this study revealed that, inflation and population growth have a negative and significant effect on household consumption expenditure. The results also demonstrate that household consumption expenditure is positively and significantly impacted by personal income and interest rates. The study recommends that government should step up efforts to rein in Nigeria's high rate of inflation in order to boost household consumption expenditures and preserve price stability in the nation. Furthermore, government should strengthen the economy in order to raise personal income so as to improve on a household consumption spending, government should also harness and increase productivity among the populace, particularly among those in the working age.
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