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Analysis Study Research Paper | Economics | India | Volume 12 Issue 5, May 2023

Analysis of Economic Factors Affecting Household Private Final Consumption Expenditure in India

Jahanvi Khurana | Susanto K Beero

Abstract: Since consumer is the key driver of demand and consumption in a developing economy like India, it is important to examine Private final consumption expenditure by households and the factors affecting it. In this context, the paper analyses commodity wise Private final consumption expenditure done by households on 11 categories from 1980- 2020 and did descriptive analysis using averages, percentages, and compound annual growth rate. It also empirically evaluates the effect of Population, Real savings, Real disposable income, Inflation (CPI as a proxy) and Deposit interest rate for 1 to 3 years on Private final consumption expenditure by households using multiple linear regression. The results depict increase trend and the changing basket for expenditure done by households and the study provides evidence that there exist a significant and positive relationship in Disposable income, Inflation, Population and Private final consumption expenditure whereas, Real savings and Deposit interest rate indicates a negative linear relationship with it.

Keywords: PFCE, Income, Savings, CPI, Multiple linear regression

Edition: Volume 12 Issue 5, May 2023,

Pages: 44 - 49