Macroeconomic Determinants of Consumption Function in Selected Developing Countries: An Empirical Analysis Using ARDL Approach

Abstract

This study is focused on comparative analysis of consumption costs in Pakistan, India, China and Bangladesh. The data for this study has taken from the database of World Bank for period of 1987 to 2019. Final consumption expenditure is a dependent variable while GDP, exchange rates and personal remittances are independent variables. The unit root test is performed using the Augmented Dicky Filler test for consistency between variables. Further analysis is done with the help of ARDL model.  Analysis unveiled that the negative impact of exchange rate on final consumption, and the positive and significant impact of income on consumer spending which supports Kenya's theory.