Welfare implication of determinants affecting aggregate consumption expenditures in Rwanda

KIGALI INDEPENDENT UNIVERSITY (ULK)

SCHOOL OF ECONOMICS AND BUSINESS STUDIES

DEPARTMENT OF ECONOMICS

POBox: 2288 KIGALI-RWANDA

AFFECTING AGGREGATE CONSUMPTION

EXPENDITURE IN RWANDA

PERIOD: 1995-2015

WELFARE

DETERMINANTS

A research thesis submitted in the partial fulfillment of the requirements of the award of bachelor's degree in economics

Submitted by: -NIZEYIMANA Alphonse: 31075

SUPERVISOR: Prof. Dr. RUFUS Jeyakumar

Kigali, September, 2016

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DECLARATION

I, NIZEYIMANA Alphonse hereby declare that this dissertation entitled «Welfare implication of determinants affecting aggregate consumption expenditure in Rwanda: 1995-2015» is my own work and it has not been submitted anywhere for the award of any degree.

NIZEYIMANA Alphonse

Tel: [phone] Email: [e-mail]

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APPROVAL

This is to certify that this dissertation work entitled «Welfare implication of determinants affecting aggregate consumption expenditure in Rwanda 1995-2015» is original research conducted by Mr. NIZEYIMANA Alphonse under my supervision and Guidance as a University full lecturer.

Supervisor: Prof. Dr. RUFUS Jeyakumar

Full Professor and Dean of the School of Economics and Business Studies at Kigali Independent University (ULK)

Email: [e-mail]

Tel: [phone]

To my brothers, sisters,
friends and beloved
relatives

To my parents with my
whole family for their
endless affection,

DEDICATION

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AKNOWLEDGMENT

I would like first to acknowledge and thank God for loving and blessing me since my birth until now.

I thank particularly Prof. Dr. RUFUS Jeyakumar who devoted part of his time to the supervision of this work. His invaluable guidance contributed to the successful completion of this research.

I would like to expand my thanks to my beloved HABIMANA Canisius's whole family.

I would like to expand my thanks to brothers and best friends: Mr. NSABIMANA Amiable, Mr. HATEGEKIMANA Jean Baptiste, M^r. HAREMIMANA Joseph, M^r. NGIRIMANA Benjamin and their families who more contributed to the achievement of this work.

Thanks go to my beloved family M^me NYIRAMBARUSHIMANA Alexandrine and my first bone BUSINGYE Thea Isabelle who all encouraged me during my studies. Thanks go to my friends, colleagues and classmates precisely in the department of economics for making my student life enjoyable.

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May God bless them!

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LIST OF ACCRONYMS AND ABBREVIATIONS

%: Percentage

AD: Aggregate Demand

ADF: Augmented Dickey-Fuller

APC: Average Propensity to Consume

APC: Average Propensity to Consume

AS: Aggregate Supply

BNR: Bank National du Rwanda

C_o: Autonomous Consumption

CPI: Consumer Price Index

DHS: Demographic Health Survey

?: Change (increase or decrease)

e: nominal exchange rate

EXCHR: Exchange rate

Frw: Rwandan Francs

GCE: Gross Consumption Expenditures

GDP: Gross Domestic Product

GNP: Gross National Product

i.e.: It means

INF: Inflation rate

INT: interest rate

LDC: Less Developed Country

LM: Lagrange Multiplier

MPC: Marginal Propensity to Consume

NDP: Net Domestic Product

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NNP: Net National Product

OLS: Ordinary Least square

PCE: Personal consumption expenditures

PP: Philip-Peron Calculated value

R²: R-square

SACCOs: Savings and Credit Cooperative Organizations

U L K: Kigali independent university

WWW: World Wide Web

X-M: Export minus Import

Y^d: Disposable income

å: Real exchange rate

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