An Analysis of Household Consumption Expenditure Behavior In case of Areka Town, Wolaita Zone

Household consumption expenditure consists of the expenditure, including imputed expenditure, incurred by resident households on individual consumption goods and services, including those sold at prices that are not economically significant. This study aims to investigate an analysis of household consumption expenditure behavior in case of Areka town, Wolaita zone. The results based on the data collected from 375 households of the town using simple random sampling technique. The findings show that an increase in income, more availability of occupation, more educated household heads, and access to credit have significant positive effect on the consumption of normal goods, while female headed household, access to credit, more educated household, and an increased income, has a significant lower to the consumption for Giffen goods. Monitoring price changes, target income growth initiatives, encourage accessible credit options for households to support consumption, promote education and occupational attainment, tailoring policies and interventions effectively target and support households, and make them better-informed decider about their consumption behavior, which can lead to more efficient use of their resources and improved well-being. Higher levels of credit access positively correlate with the likelihood of households falling into the category of normal goods. This suggests that easier access to credit might stimulate spending on goods within the local economy. An increase in income is associated with a higher likelihood of falling into the normal goods. Therefore, the findings call zonal and woreda’s level education office, financial Program, municipalities and local economic sectors so as to provide valuable information to households on factors that influence their consumption behavior, such as changes in prices perceived, income, and availability of credit access