Habits, Rule-of-Thumb Consumption and Useful Public Consumption in Sub-Saharan Africa: Theory and New Evidence
| dc.contributor.author | Francois, John Nana | |
| dc.date.accessioned | 2023-05-02T05:25:21Z | |
| dc.date.available | 2023-05-02T05:25:21Z | |
| dc.date.issued | 2023 | |
| dc.description.abstract | I derive and estimate a structural consumption model for a panel of 34 sub-Saharan Africa countries from 1960–2018 to uncover three important aggregate consumption behaviours: habit formation, rule-of-thumb consumption and the complementarity of government consumption in private utility. The following findings emerge: (1) There is evidence of habit formation in consumption. (2) Approximately 38% of consumers follow the rule of thumb of consuming their current income. This rule of-thumb consumption behaviour in the data is driven by the period before the mobile money era that emerged post-2000s. (3) Public consumption complements private consumption in an Edgeworth-Pareto sense. This suggests that increases in government consumption can stimulate aggregate demand via a positive marginal utility channel. | en_US |
| dc.identifier.uri | https://publication.aercafricalibrary.org/handle/123456789/3588 | |
| dc.publisher | African Economic Research Consortium | en_US |
| dc.subject | Habits; Edgeworth complementarity; Rule-of-thumb agents; Fiscal and monetary policy; sub-Saharan Africa | en_US |
| dc.title | Habits, Rule-of-Thumb Consumption and Useful Public Consumption in Sub-Saharan Africa: Theory and New Evidence | en_US |