Unfolding Factors Influencing Household Expenditure in Private Households in the Tanzania Mainland Using Quantile Regression

Abstract

The purpose of this paper was to unfold factors that influence household expenditure using quantile regression methods. Secondary data were used with a probability sample of 9,552 households from the 2017-18 Household Budget Survey (HBS) covered the population residing in private households in Tanzania Mainland. The sample was designed to allow separate estimates for each of the 26 regions of the Tanzania Mainland, as well as urban and rural areas separately at the national level. The 2017-18 HBS adopted a two-stage cluster sample design. In the quantiles analysis, there has been consistency on the effect of household consumption, education level and household age on household expenditure. These showed a statistical significance at 5% level of significance. Except for the 25th quantile, all the three variables were statistically significant in the 50th and 75th quantiles. Further household age, household consumption and marital status of the household head had positive coefficients which implied a positive relationship with the household expenditure. It can thus be concluded that, of the seven independent variables, household age, household consumption and household marital status are the variables which influences positively household expenditure. By considering these findings, policymakers and researchers can develop targeted strategies to address economic disparities and enhance household financial well-being effectively to balance between household income and expenditure.