Citations


Contact Us

For Marketing, Sales and Subscriptions Inquiries
2637 E Atlantic Blvd #43110
Pompano Beach, FL 33062
USA

Conference List

Journal of Social Economics Research

April 2015, Volume 2, 4, pp 58-74

An Assessment of the Relationship between Budget Deficit Syndrome and Consumer Welfare in Nigeria (1985 – 2014)

Fasoranti M.M.

,

Akindele, Olawale Olamide

Fasoranti M.M. 1 ,

Akindele, Olawale Olamide 1 
  1. Department of Economics, Adekunle Ajasin University, Akungba-Akoko, Nigeria 1

Pages: 58-74

DOI: 10.18488/journal.35/2015.2.4/35.4.58.74

Share :


Abstract:

Nigeria over the years have concurrently operated deficit budget, though there have been various studies on the relationship between budget deficit and macroeconomic variables but the relationship between budget deficit and consumer welfare have not really been researched into in Nigeria. The study investigated the relationship between budget deficit syndrome and consumer welfare in Nigeria for the period 1985-2014. The data were analyzed with the Fully Modified Ordinary Least Square Approach (FMOLS). The time series properties of the data were tested by ADF unit root and johansen co-integration test. A uni-directional causal relation existed between consumer welfare and budget deficit while bi-directional causality existed between consumer welfare and indirect tax. The empirical findings revealed a minimal positive and insignificant impact of the budget deficit on consumer welfare, as a 1 per cent increased in budget deficit caused less than 1per cent (0.008) increased in consumer welfare. The study thereby concluded that budget deficit did not have significant influence on consumer welfare during the period under study. It is therefore necessary for the government to build fiscal strategy by promoting fiscal prudency and disciplines that will reduce wastage and linkages in the system which will be geared toward the consumer welfare gain.

Contribution/ Originality
This study contributes to the existing literature on budget deficit as it affects the consumer welfare and it provides empirical linkages between budget deficit, consumer welfare, inflation, indirect tax and interest rate. This study is one of very few studies which have investigated the relationship between budget deficit and consumer welfare in Nigeria which was inadequately investigated in previous studies.

Keywords:


Video:

Reference:

  1. Akman, P., 2009. Consumer welfare and article 82EC: Practice and rhetoric; CCP Working Paper. ESRC Economic and Social Research Council, 23(2): 08-25.
  2. Al-abdulrazag, A.B. and N.W. Ameerah, 2013. The determinants of employment in Jordan: A time series analysis. International Review of Management and Business Research, 2(4): 2306-9007.
  3. Ali, D.U. and U.A. Ahmad, 2014. Fiscal deficit and economic growth in Nigeria: A disaggregated approach. Journal of Research in National Development, 12(1): 1596-8308.
  4. Bajari, P., L. Benkard and J. Krainer, 2005. Household prices and consumer welfare. Journal for Urban Economics, 58(5): 474-487.
  5. Barrand, A.A., 2008. Poverty effect from trade liberalisation in Argentina. Journal of Development Studies, 44(3): 103-113.
  6. CBN, 2007. Statistical bulletin. Garki, Abuja: Central Bank of  Nigeria Annual Publication.
  7. Central Bank of Nigeria (CBN), 2013. Statistical bulletin. Garki, Abuja: Central bank of  Nigeria Annual Publication.
  8. Chaifik, K. and B. Younce, 2012. Relationship between C.E.O ownership and debt. International Review of Management and Business Research, 3(6): 1-5.
  9. Cseres, K.J., 2007. The controversies of the consumer welfare standard. Competition Law Review, 3(2): 121-173.
  10. Engle, R.F. and C.W.J. Granger, 1987. Co-integration and error correction: Representation, estimate and testing. Econometrica, 55(2): 251-276.
  11. Fabiosa, J.F. and H. Jensen, 2002. Microeconomic adjustments of households to macroeconomic shocks: Household level welfare impacts of the Indonesian economic crisis. Long Beach: Presented at the AAEA Meeting.
  12. Fadiya, O. and E. Odior, 2011. Macroeconomics volatility and private consumption expenditure; implication for household welfare: A dynamic macro-econometric stochastic model. European Journal of Social Sciences, 20(1): 109-114.
  13. Friedman, B.M., 1968. The role of monetary policy. American Economic Review, 58(6): 1-17.
  14. Heien, D. and C.R. Wessels, 1990. Demand system estimation with micrdata: A censored regression approach. Journals of Business and Economic Statistics, 8(3): 365-371.
  15. Horvath, M., 2009. The effect of government spending shocks on consumption under optimal stabilization. Center for Dynamic Macroeconomics Series Analysis Working Paper, No. CDMA08/05.
  16. Igwe, O. and C. Omoke, 2010. Budget deficit, money supply and inflation in Nigeria. European Journal of Economics, Finance and Administrative Sciences, 19(3): 92-101.
  17. Isaih, P., 2012. Deficit financing and Its implication on private sector investment: The Nigerian experience. Arabian Journal of Business and Management Review, 1(9): 20-25.
  18. Jhingan, M.L., 2003. Macroeconomic theory. 10th Edn., New Delhi: Vrinde publications Ltd.
  19. Khemani, R.S. and D.M. Shapiro, 1993. Glossary of industrial organisation economics and competition law, compiled. Financial, Fiscal and Enterprise Affairs, OECD.
  20. Lavi and Strawczynski, 2005. Impact of fiscal policy on private consumption in Israel. Israel Economic Review, 3(11): 133-146.
  21. Leyaro, A., 2009. Commodity prices changes and consumer welfare in Tanzania in the 1990s and 2000s. School of economics. Nottingham University.
  22. Linneman and Schabert, 2004. Can fiscal spending stimulate private consumption. Economics Letter, 82(4): 173-179.
  23. Lozano, I., 2008. Budget deficit, money growth and inflation: Evidence of Colombian case first version. Journal of Business and Economic Statistic, 13(1): 409-1117.
  24. Lyroudi, K., 2003. Effect of budget deficit on private consumption in transition economy. South Eastern Journal of Economics, 34(6): 53-60.
  25. Maratin and Marzo, 2010. The multiplier effect of non-wasteful government expenditure. Quadrin Working Papers DSE No. 704.
  26. Nevo, A., 2012. Measurement of consumer welfare. Northwestern University, 12(1): 1-26.
  27. Nicita, A., 2004. Who benefited from trade liberalization in Mexico? Measuring the effect on household welfare. WWrld Bank Policy Research Working Paper No. 3265, Washington D.C.
  28. Oduwara, S.A., 2011. The relationship between government expenditure and macroeconomics performance. Proquest Dissertation and Thesis.
  29. Ogunmade, O., 2015. Senate: Nigeria to run 2015 budget in deficit. Thisdays Live. Available from www.thisdaylive.com/articles/senate-nigeria-to-run-2015-budge-in-deficit/199264/.
  30. Okoro, A.S., 2013. Deficit financing and trade balance in Nigeria. Internation Journal of Accounting Research, 2(1): 5-11.
  31. Oladipupo, S.O. and T.O. Akinbobola, 2011. Budget deficit and inflation in Nigeria: A causal relationship. Journal of Emerging Trends in Economics and Management, 2(1): 1-8.
  32. Olomola, P.A. and M.A. Olagunju, 2004. Fiscal deficit and private consumption in Nigeria. Indian Journal of Economics, 134(335): 597-607.
  33. Phillips, P.C.B. and B.E. Hansen, 1990. Statistical inference in instrumental variable regression with I (1) processes. Review of Economic Studies, 57(12): 99-125.
  34. Porto, G., 2006. Trade reforms market access and poverty in Argentina. Washington, D.C: World Bank.
  35. Shonkwiler, J.S. and S. Yen, 1999. Two - step estimation of a censored demand system of equations. Ameriacan Journal of Agricultural Economics, 81(1): 972-982.

Statistics:

Google Scholor ideas Microsoft Academic Search bing Google Scholor

Funding:

Competing Interests:

Acknowledgement:


Related Article

( 1 ) An Assessment of the Impact of Information Communication Technology (ICT) On the Administration of Public Records: A Case Study of the Bolgatanga Municipal Assembly in the Upper East Region of Ghana-West Africa
( 2 ) An Assessment of the Relationship between Budget Deficit Syndrome and Consumer Welfare in Nigeria (1985 – 2014)
( 3 ) Assessment of Dual Carriageway for Sustainable Socio-Economic Development in Ado Ekiti, Nigeria
( 4 ) An Empirical Assessment of the Impact of Access to Credit on Farm Output: A Case Study of Sefwi-Wiawso Municipality Ghana
( 5 ) Seasonal Assessment of Relative Humidity, Ambient Air Temperature and CO2 Concentration Level in School Buildings of Kigali-Rwanda
( 6 ) Consideration the Relationship Between Information Communications Technology and Economic Growth in Top 10 Economic
( 7 ) Relationships Between Leadership Roles and Project Team Effectiveness as Perceived by Project Managers in Malaysia
( 8 ) Relationships among Team Trust, Team Cohesion, Team Satisfaction and Project Team Effectiveness as Perceived by Project Managers in Malaysia
( 9 ) Long-Run Relationships and Causality Tests Between Military Expenditure and Economic Growth in India
( 10 ) Study of the Relationship between Economic Growth and Inflation: Application to the Countries of the South Side of the Mediterranean: A Panel Data Approach
( 11 ) Relationships between Financial Development and Economic Growth: A New Approach by Inputs
( 12 ) Moderating Effect of Demographics on Monetary Motivation and Employees Job Performance Relationship: Evidence from Malaysia
( 13 ) Moderating Effects of Project Management Experience, Project Team Size, Project Duration and Project Value Size on the Relationship between Project Manager’s Leadership Roles and Project Team Effectiveness in Malaysia
( 14 ) The Mediating Effect of Market Orientation on the Relationship between Entrepreneurial Orientation Dimensions and Organizational Performance: A Study on Banks in Libya
( 16 ) Causal Relationship between Imports and Economic Growth in Zimbabwe: An Empirical Analysis 1975 – 2013
( 17 ) Education and Income Relationship in Turkey
( 18 ) Market Share and Profitability Relationship: A Study of the Banking Sector in Nigeria
( 19 ) The Lead-Lag Relationships between Construction Investment and GDP: Granger Causality Tests and Impulse Responses Using Japanese Data
( 20 ) Examining Long Run Relationship between Household Debt and Household Savings in South Africa – An Error Correction Model and Granger Causality
( 21 ) The Relationship between Currency Conversions and International Business Transactions: Small Businesses and Travelers
( 22 ) The Moderating Effect of Governance Mechanisms on the Relationship Between Innovation Strategy and the Performance
( 23 ) An Investigation of the Relationship between Manufacturing Output and Economic Growth : Evidence from Nigerias Data Set
( 24 ) The Transitional Relationship between Economic Growth and Exchange Rate in Ghana: An Empirical Approach
( 25 ) The Relationship between Financial Development, Economic Growth, and Inflation: Evidence from Southeast Asia
( 26 ) The Mediating Effect of Financial Self-Efficacy on the Financial Literacy-Behavior Relationship: A Case of Generation Y Professionals
( 27 ) The Relationship between Creative Accounting Risks and Auditing Risks from the Perspective of External Auditors in Saudi Arabia
( 29 ) New Evidence on the Link Between Income Inequality and Misery Index: A Nonlinear Time Series Analysis
( 32 ) The Nexus between Financial Crisis and Household Consumption: Evidence from Emerging Countries
( 35 ) The Interactions between Culture, Global Mindset and Leadership in Global Context
( 36 ) The Association Between Corporate Risk Disclosure and Firm Performance in Emerging Country – The Case of Egypt
( 38 ) Republic of Zimbabwe National Water Policy: A Desk Review of the Gaps between the Policy and Its Implementation
( 41 ) The Correlation Between the Palestinian Civil Society Institutions and the Universities (Status: The Palestine Technical University Kadourie with Tulkarm Institutions)
( 42 ) Measuring the Gap Between the Syrian Accounting Qualifications and the International Accounting Education Based on IES 2 and IES 3
( 44 ) Development of the National Economies and the Foreign Trade Relations between Ukraine and Bulgaria (In the Period 2005-2014)
( 46 ) A Theoretical Analysis Upon the Environmental Health and Justice Issue: A Case Study for a Comparison Between G20s Unitary and Federal Members
( 49 ) Interfaces Between Road Infrastructure and Poverty in Africa: The Case of Malawi, 1994-2013
( 50 ) The Link Between Agricultural Budgetary Allocation and Economic Growth in Nigeria
( 53 ) Measuring and Assessing the State of Technological Innovations and the Level of Interaction between Rice Processors and Stakeholders in Rice Processing Industry in Nigeria
( 54 ) The Nexus between Urbanization, Energy Demand and Healthcare in Bangladesh
( 55 ) Correlation between Financial Difficulties and Financing Strategies among Market Stallholders in Batangas City
( 58 ) Problems of Bilateral Trade Deficit between Bangladesh and India: A 2SLS Regression Analysis
( 59 ) Exploring the Asymmetric Linkage between Commodity Prices and Fiscal Performance in Nigeria
( 60 ) Nexus between Non-Oil Sectoral Contribution and Economic Growth in Nigeria 1981-2018
( 61 ) Analysis of Causal Nexus between Defense Spending and Economic Growth in Nigeria: A Toda-Yamamoto Approach
( 63 ) The Contingent Fit between Management Control System and Capabilities on Sustainability Performance
( 64 ) Exploring the Linkages between Remittances, Economic Growth and Poverty: Empirical Evidence from Pakistan
( 66 ) Effect of Budget Defict on Private Investment in East African Community for the Period 1981-2015: A Panel Data Analysis
( 70 ) Deficit Financing Asymmetry and Nigerias Economic Growth: A Nonlinear Autoregressive Distributed Lag Approach
( 72 ) A Multidimensional Structure of Shopping Centre Visit Objectives - An European Consumers Perspective
( 73 ) Green Products Purchasing Among Malaysian Consumers
( 74 ) Awareness and Perception of Muslim Consumers on Halal Cosmetics and Personal Care Products
( 75 ) Effects of Advertising on Consumer Behavior in Low Density Houses: The Case of Marlborough, Zimbabwe
( 77 ) The Effect of Exchange Rate Changes on Consumer Prices in Nigeria: Evidence from VECM Model
( 78 ) Consumers’ Behavioural Intention to Adopt Mobile Banking in Rural Sub-Saharan Africa Using an Extension of Technology Acceptance Model: Lessons from Zimbabwe
( 79 ) The Effect of Capital Structure Decisions on Profitability of Quoted Consumer Goods in Nigeria
( 80 ) The Impact of Data Frequency on the Level of Exchange Rate Pass-through to Consumer Prices in Nigeria
( 82 ) Productive Welfare Policy: An Innovative Way in Social Safety Net in Malaysia
( 83 ) Contemporary Approach to Enhanced Road Transport System in Nigeria Through the Application of It-Based (Online) Bus Ticketing and Payment System
( 84 ) Impact of Labour, Capital and Human Resources in Productivity of Transport Firms in Nigeria
( 85 ) The Impact of Investment Climate Reforms on the Development of Small and Medium Sized Enterprises in Nigeria: A Policy Brief
( 86 ) Gaining Trust After the Financial Crisis in the Nigerian Economy: A Conceptual Framework
( 87 ) An Enquiry into the Contributions of Microfinance Institutions Towards the Development of Small Scale Business in Nigeria
( 88 ) Exchange Rate Movements, Import And Economic Growth in Nigeria (1986-2010)
( 89 ) Challenges of Human Rights Abuses in Nigerian Democratic Governance – Which Way Forward ?
( 90 ) Public Infrastructure Spending and Economic Growth in Nigeria: An Error Correction Mechanism (ECM) Approach
( 91 ) Impact of Microfinance Lending On Economic Growth of Third world Nations: Study of Nigeria
( 92 ) Anti-Corruption Crusade in Nigeria: More Words Than Deeds
( 93 ) Social Security; A Public Policy for Good Governance in Nigeria: The Role of Nigerian Legislature
( 94 ) National Urban Development Policy and the Unanswered Development Question of Slum in Nigeria
( 95 ) Government Borrowing Behaviour: Implications for Private Sector Growth in Nigeria
( 96 ) Effective Tax Administration and Institutionalization of Accounting Systems in Small and Medium Scale Enterprises: Evidence from Nigeria
( 97 ) The Impact of Rice Production, Consumption and Importation in Nigeria: The Political Economy Perspectives
( 98 ) Good Governance, Rural Development and Poverty Alleviation in Nigeria: Issues and Challenges
( 99 ) Federalism and Planning in Nigeria
( 100 ) Structural Breaks and the Long-Run Stability of Demand for Real Broad Money Function in Nigeria: A Gregory-Hansen Approach
( 101 ) Stock Market Performance and Economic Growth: Evidence from Nigeria Employing Vector Error Correction Model Framework
( 102 ) Rural Saving Mobilizations and Economic Development in Akamkpa Local Government Area of Cross River State - Nigeria
( 103 ) The Phenomenon of Money Politics and Nigeria’s Democratization: An Exploration of the Fourth Republic
( 104 ) Nigerian Politics, Economic Development, and the Role of Human Rights Organisations on Elections
( 105 ) The Effects of Changes in Accounting Standards on Value Relevance of Financial Statement Information of Malaysia and Nigeria Banks
( 106 ) Insecurity and Foreign Direct Investment in Nigeria
( 108 ) Determinants of Share Price Movement in Nigeria -The Management Perspective
( 111 ) Quality of Accounting Reporting After the IFRS Adoption in Nigeria
( 112 ) Structural Breaks, Electricity Generation and Economic Growth in Nigeria
( 113 ) Comparative Analysis of the Effectiveness of Coub-Douglas, Real Business Cycle, and Keynsian Growth Models in Determining Economic Growth in Nigeria
( 114 ) Implications of Crude Oil Price Volatility and Parallel Exchange Rate Fluctuation on the Cost of Living in Nigeria
( 115 ) National Security and Democratization in Nigeria: The Case of Insurgence
( 117 ) Relevance of Stakeholders Theory, Organizational Identity Theory and Social Exchange Theory to Corporate Social Responsibility and Employees Performance in the Commercial Banks in Nigeria
( 118 ) Effects of Corporate Social Responsibility on Banks Financial Performance in Nigeria: A Study of United Bank of Africa
( 119 ) Rural Roads Infrastructure and Agricultural Products Distribution: A Focus on Akure South Local Government Area, Ondo State, Nigeria
( 120 ) The Effects of Exchange Rate Variability on Trade Flows in Nigeria: A Cointegration Analysis
( 121 ) Military Regimes and Nigeria’s Economic Development, 1966-1999
( 122 ) Social Protection Programmes, Agricultural Production and Youth Employment in Nigeria: Analysis from LSMS-ISA
( 123 ) Entrepreneurial Networking and Women Entrepreneurs’ Contribution to Employment Creation in Rivers State, Nigeria
( 125 ) Employee Loyalty and Organizational Citizenship Behaviour in the Port Harcourt Area Command of the Nigeria Police Force
( 126 ) Effect of Institutional Factors on Foreign Direct Investment in Nigeria
( 128 ) Macroeconomic Indicators and Capital Formation Growth in Nigeria: A New Evidence
( 129 ) Foreign Capital Inflows and Unemployment in Nigeria: A New Evidence from ARDL-Bounds Testing Approach
( 130 ) Electronic Banking Innovations and Selected Banks Performance in Nigeria
( 131 ) Disaggregated Foreign Capital Inflows and Economic Growth in a Developing Economy: Empirical Evidence from Nigeria
( 132 ) Urban Population Growth and Environmental Sustainability in Nigeria
( 133 ) Depositors Confidence and Mergers and Acquisitions: The Nigerian Banking Sector Experience
( 135 ) Determinants of Public Sector Corruption in Nigeria
( 136 ) Exchange Rate and Foreign Reserves Interface: Empirical Evidence from Nigeria
( 137 ) Uncertainties in Global Economic Policy and Nigerias Export Earnings
( 138 ) Public Health Expenditure, Economic Growth and Health Outcomes in Nigeria
( 139 ) Sectoral Credit Allocation of Deposit Money Banks and Poverty Reduction in Nigeria
( 140 ) The Roles of Labour Union in Nigeria Industrial Harmony and Development
( 141 ) Gamification on Sales Force Performance in Nigeria Bottling Company
( 142 ) Impact of Exchange Rate Fluctuation on Selected Economic Sectors of the Nigerian Economy
( 143 ) External Debt and Nigeria's Sovereignty