Empirical Analysis of Change in Income on Private Consumption Expenditure in Nigeria from 1981 to 2010

This study investigates the impact of change in gross domestic product (income) on private consumption expenditure in Nigeria, from 1981 to 2010. Using the classical (OLS) simple regression analysis, researchers’ objectives were; to examine the impact of gross domestic product on consumption expenditure and to determine the order of integration of consumption expenditure and gross domestic product, results agree with researchers’ theoretical expectation of the existence of a positive significant impact of Gross Domestic Product (income) on Private Consumption Expenditure with a slope of 0.6708253. The unit root test (order of stationary) also shows a non existence of unit root at their level. The p-value and the coefficient of determination (R2 = .9838), implies that gross domestic product explains 98.4% of private consumption expenditure. Hence, there is a significant relationship between gross domestic product and private consumption expenditure. Researchers’ therefore recommended a policy in concluding remarks.