Examining Kenya’s Household Consumption, Causal Factors and Economic Policy Measures to Address Gaps in Consumption
Abstract
This paper examines Kenya’s household consumption expenditure causal variables for a period of 40 years from 1984 to 2023, estimating the consumption function as a function of consumer price index, exchange rate, the country’s GDP rates, and population size. The objective of this study is to investigate the factors affecting the consumption behaviour and also seeks to understand Kenya’s consumption patterns over-time. OLS method was used to analyse consumption causal factors. The independent variables in the model accounts for 99.64% variation in consumption expenditure, this is as per calculated R-squared, indicating the best fit. The following economic policies were recommended to improve consumption in Kenya: fostering stable economic growth, human capital investment for example education, management of inflation rate, having a stable exchange rate, implement tax cut measures, implementations of social nets programs, investment in agricultural sector to boost farm yield, address negative externalities of population growth, monetary policy intervention, balanced regional development, and investment in modern technology.
Keywords
Consumption, GDP, exchange rate, population, consumer price index and disposal income.
Citations
IRE Journals:
Moses O. Otiang’a , Dr Yasin Ghabon
"Examining Kenya’s Household Consumption, Causal Factors and Economic Policy Measures to Address Gaps in Consumption" Iconic Research And Engineering Journals Volume 8 Issue 9 2025 Page 1023-1029
IEEE:
Moses O. Otiang’a , Dr Yasin Ghabon
"Examining Kenya’s Household Consumption, Causal Factors and Economic Policy Measures to Address Gaps in Consumption" Iconic Research And Engineering Journals, 8(9)
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