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Household expenditure in Africa: evidence of mean reversion
Date
2023
Abstract
This paper investigates the mean reversion in household consumption expenditure in 38 African countries; the expenditure series used were the percentage of nominal Gross Domestic Product (GDP), each spanning 1990 to 2018. Due to a small sample size of time series of household expenditure, with possible structural breaks, we used the Fourier unit root test approach, which enabled us to model both smooth and instantaneous breaks in the expenditure series. The results showed non-mean reversion in the consumption expenditure pattern of Egypt, Madagascar and Tunisia, while mean reversion was detected in the remaining 35 countries. Thus, the majority of African countries are on the verge of recession once shocks that affect the growth of GDP are triggered. Findings in this paper are of relevance to policymakers on poverty alleviation programmes in those selected countries.
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Description
Publisher
Polish Statistical Association (PTS) and Statistics Poland (GUS)
Citation
Statistics in Transition, 2023, 24 (3), pp. 171-186
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Funding code
Funding Information
Sustainable Development Goals
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Type
Article
Rights
https://creativecommons.org/licenses/by-nc-sa/4.0/