Comparative Analysis of the Determinants of Households’ Consumption in WAEMU and CAEMU Zones: A Panel Data Study
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This study uses panel data covering the period 1990- 2017 to conduct a comparative analysis of the determinants of households’ consumption in WAEMU and CAEMU zones. Although many factors affect consumption, the study concentrates on the relationship between consumption and real GDP, savings, investment, money, CPI and democratic index. The empirical results based on OLS and FMOLS methods indicate that these variables are for the most part non-stationary in level and there exists between them a long-term cointegration relation which makes the function of the households’ consumption stable. The results from the FMOLS estimator are more robust than those obtained from the OLS estimator. Also, at the CAEMU zone level more variables explain the variation of the households’ consumption than at the WAEMU level. Finally, the empirical results are in line with the macroeconomic theory because of the robustness of the model that attests to the usefulness and effectiveness of the econometric analysis of non-stationary panel data in the institutional framework of the Franc zone.
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