An Application of Ordered Logit Model in Investigating the Impact of Economic Crisis on Households’ Consumption Behavior in Kano Metropolis, Kano State-Nigeria

Abstract

There has been a significant decline in the purchasing power of households, increased unemployment and poverty in Nigeria due to the current economic crisis in the country. This study was designed to investigate the impact of the economic crisis on households’ consumption behaviour in Kano Metropolis, Kano State-Nigeria. Data was collected from a sample of 269 civil servants with the use of a structured questionnaire. Simple percentage and Ologit regression techniques were adopted in the analysis of the data collected. It was found that the majority of the respondents were male and married and mostly possessed NCE/Diploma education qualifications. The result further reveals that due to the current economic crisis in the country, the likelihood of the civil servants’ consumption behaviour is positively affected by the level of education, income, work experience and the practice of secondary occupation by the household, while the family size and change in price level affect the household consumption behaviour negatively. The study recommends that the government should formulate a suitable macro-economic policy to achieve price stability to improve the purchasing power of individuals and that wages of civil servants need to be increased to enable them to improve their consumption behaviour and general levels of living.