ANALYSIS OF HOUSEHOLD EXPENDITURE PATTERNS

IN AMURU DISTRICT

(A Case study of Amuru sub-county)

By

Omony Nobert

August 2011

i

Acknowledgement

I would like to acknowledge the support rendered to me by Prof. J.B Odoki, Hon Aciro Concy

and Mr J.B Asiimwe. Thanks to my parents Mr and Mrs Dera and the family members, Lastly to

all lecturers of the institute of statistics and applied economics.

ii

Abbreviations and Acronyms

IDPs Internally Displaced Persons

LRA Lords Resistance Army

MoFPED Ministry of Finance Planning and Economic Development

UBOS Uganda Bureau of Statistics

UNHS Uganda National Household Survey

UPE Universal Primary Education

USAID United States Agency for International Development

USE Universal Secondary Education

iii

Abstract

This research analyse household expenditure patterns in Amuru district. It also aim at

determining the expenditure patterns of the various households with respect to the demographic

and social characteristics of the household heads such as gender, education level and marital

status. and it also take in to consideration expenditure patterns of selected items like education,

food stuff and among others.

And the objectives are to determine if there are variations in the expenditure patterns among the

households. Also to determine if the expenditure patterns depends on the demographic and social

characteristics of the household heads.

The methodology used in this research provides how the study is carried out which entails

among others data collection procedures, processing and ways of analysis and presentations

The main source of data is primary data, collected from the household heads in the villages of the

sub county.

The key findings are not dependant on the social and demographic characteristics of the

household heads and the characteristics of the household heads didnt affect much the

households expenditure pattern.

Conclusions and recommendations shall give key findings and provide the ways forward of

solving and overcoming the short falls in the expenditure patterns.

iv

Table of contents

Declaration ........................................................................................................................................

Acknowledgement ........................................................................................................................... i

Abbreviations and Acronyms ......................................................................................................... ii

Abstract .......................................................................................................................................... iii

Chapter 1 ......................................................................................................................................... 1

Introduction ..................................................................................................................................... 1

1.1 Background to the Study ...................................................................................................... 1

1.2 Problem Statement ............................................................................................................... 2

1.3 Purpose of the Study ............................................................................................................ 3

1.4 Aim and Objectives of the Study ......................................................................................... 4

1.4.1Aim ................................................................................................................................ 4

1.4.2Objectives ...................................................................................................................... 4

1.4.3Specific Objective .......................................................................................................... 5

1.5 Hypotheses ........................................................................................................................... 5

1.6 Structure of the Dissertation ................................................................................................ 5

Chapter 2 ......................................................................................................................................... 7

Review of Literature ....................................................................................................................... 7

2.1 Introduction .......................................................................................................................... 7

2.2 Household Income and Consumption Expenditure ............................................................. 7

v

2.3 Household Expenditure on Health ....................................................................................... 8

2.4 Household Expenditure on Education ................................................................................. 9

2.5 Household Expenditure on Energy and Transport ............................................................... 9

Chapter 3 ....................................................................................................................................... 11

Research Methodology ................................................................................................................. 11

3.1 Introduction ........................................................................................................................ 11

3.2 Determination of data sources and Study Area .................................................................. 12

3.3 Sampling and Design of field Study .................................................................................. 13

3.4 Data collection and Processing ............................................................................................... 14

3.5 Data Analysis and presentation of results .......................................................................... 15

3.5.1 Empirical mathematical impact model Specification ................................................ 16

3.5.2 Description of Variables in the Econometric Model ................................................. 16

3.5.3Cross Tabulation Technique ....................................................................................... 17

Chapter 4 ....................................................................................................................................... 18

Results of the Analysis and Findings ............................................................................................ 18

4.0 Introduction ............................................................................................................................. 18

4.1: Background Characteristics of the Respondents ................................................................... 18

4.2 Dependence of Household Expenditure on Demographic Characteristics of the Household

Heads............................................................................................................................................. 20

4.3 Economic Impact of Characteristics of Household Heads on Expenditure Pattern ................ 20

vi

4.4 Expenditure Patterns by Demographic Characteristics of Household Heads ......................... 21

4.5 Average Expenditure on the Items .......................................................................................... 22

4.5.1 Expenditure on Education by the Households ................................................................ 23

4.5.2 Food Expenditure by the Households ............................................................................. 24

4.5.3 Households Expenditure on Health ............................................................................... 24

4.5.4 Households Expenditure on Energy and Transport ....................................................... 25

4.6 Summary ................................................................................................................................. 25

Chapter 5 Conclusions and Recommendations

5.1 Conclusions ............................................................................................................................. 26

5.2 Recommendations......28

References ...................................................................................... Error! Bookmark not defined.

Appendices .................................................................................................................................... 30

Appendix A ................................................................................................................................... 31

vii

List of tables

Table 3.1: Sample Selection and Distribution from the two Parishes in Amuru Sub-County

Table 4.1: Percent and Frequency Distribution of the Household Heads by Social Demographic

Characteristics

List of figures

Figure 3.1: Flow diagram illustrating the overall research methodology

Figure 4.1: Expenditure Patterns on selected Items

List of appendices

Appendix A: The questionnaire used for the survey

Appendix B: Demographic and social characteristics of the household heads

Appendix C: Average expenditure by social demographic and economic characteristics of the

household heads

viii

1

Chapter 1

Introduction

1.1 Background to the Study

Households income and consumption expenditure data have been useful in monitoring living

standards of different societies in Uganda and internationally. However, household consumption

expenditure is usually preferred over income in assessing poverty incidence as it is more

accurately reported by the households and their individual members. In quantitative economics,

consumption expenditure is considered to be one of the determinants of economic and social

welfare of the society, which is defined as the aggregate of all the individuals welfare. Therefore

to determine the economic and social welfare of the society, we need to determine the individual

households welfare by obtaining each individuals expenditure pattern on various necessary

commodities such as education, transport, energy, health and food items. Infrastructures such as

schools, hospitals, roads are also key indicators of levels of social and economic welfare of the

society; their availability determines how the household spend. The expenditure patterns of

households are affected by both market and social factors like inflationary tendencies, for

example the runaway inflation which is currently being experienced in Uganda, that lead to

increase in prices of essential commodities hence higher costs of living. Households income

levels and the marginal propensity to consume by the households tend to change the monthly

expenditure patterns of the households.

2

The Uganda Bureau of Statistics (UBOS), formerly the statistics department under Ministry of

Finance, Planning and Economic Development (MoFED) has conducted a number of surveys

since 1989. These include the Uganda National Household Surveys of 1999/2000 and 2005/2006

which were aimed to provide data on a system of socio-economic indicators against which to

monitor development. Data on income and expenditure shows that monthly expenditure has

normally increased by 40% between 1997/1998 and 2000. However, accounted expenditure on

food, drink and tobacco had fallen from 59% to 51% and 50% of the poorest households

contribute only 20% of the total household expenditure as the result of low income which cannot

be spent on some commodities.

In education, the establishment of Universal Primary Education (UPE) in 1997 has led to

increase in primary school enrolment from around 3 million in 1997 to 7.5 million pupils in 2005

and 2006. This target was to improve on the literacy of the population where every family is

entitled to free education of up to 4 children in a family and the introduction of Universal

Secondary Education (USE) in the year 2007. This has however reduced household expenditure

on education. Although that was good, parents still spend a lot of money on buying scholastic

materials.

1.2 Problem Statement

A number of studies on the patterns of expenditure of households have been undertaken by

various organizations such as USAID (2005), UBOS (2006), Agewell (2010), and other

individuals including Maliwichi, et al. (2003) and Gardner (2005). However, these research

works do not provide enough evidence as to why there are variations in the household

expenditure patterns within and across communities. Household expenditure differs from one

3

household to another. The difference in the expenditure patterns is expected due to some factors

related to the household (e.g. size or the number of people in the household) and the

characteristics of household heads such as age, sex, level of education, marital status.

This research investigates household expenditure pattern in Amuru District, which is located in

Acholi Sub-region in Northern Uganda. This part of Uganda experienced a brutal war that raged

between Uganda Government and the Lords Resistance Army (LRA) for over twenty years. The

war caused internal displacement of affected persons and disrupted economic activities of most

households in the district. This led to considerable changes in households consumption and

expenditure patterns. Thus, in addition to the factors that influence households expenditure

pattern given in the paragraph above, this research indirectly investigated the impact of factors

such as war and insecurity on household expenditure pattern.

1.3 Purpose of the Study

The purpose of this research is to investigate household expenditure patterns of residence of

Amuru District, by identifying homogeneous groupings in terms of their average income level

and key social demographic characteristics, determining their spending power and explaining the

reasons underlying their expenditure patterns. It is expected that the results of this research will

be useful for formulating policies and developing strategies and programmes aimed at improving

living standards of the various communities in Amuru and the neighbouring districts.

4

1.4 Aim and Objectives of the Study

1.4.1 Aim

The aim of this study is to determine the consumption expenditure patterns of the households in

Amuru District with respect to selected major livelihood items including food, medical services

and transport.

1.4.2 Objectives

The main objectives of the study are as follows:

1. To determine the variability in expenditure patterns among the various households.

2. To find out if the expenditure patterns of the different households depend on the

status of the household heads and other characteristics such as sex and age.

3. To determine if expenditure of a household depends on the size of the household

defined in terms of the number of people in the household.

4. To determine which livelihood item takes the majority of the households total

expenditure.

5. To determine if the total expenditure of the households depend on the source of

income of the household heads

5

1.4.3 Specific Objective

To provide data on the distribution of income and expenditures throughout Amuru District and to

examine the extent to which social demographic characteristics of the household head influence

expenditure patterns of the households in the district.

1.5 Hypotheses

The key hypotheses used in this study are summarized as follows:

1) There is no variation in total expenditure of the households within a homogeneous group.

2) Household expenditures do not depend on the sex and age of the household head.

3) Household expenditure patterns do not depend on the level of education of the household

head and the source of income of the household heads.

4) A households total expenditure does not depend on the marital status of the household

head.

5) Household total expenditure does not depend on the size of the household.

1.6 Structure of the Dissertation

This dissertation is structured into five chapters as follows:

Chapter 1: Introduces the study by giving the background of the study, problem statement, the

purpose of the study, aim and objectives, and the hypotheses of the study.

Chapter 2: Reviews previous studies on the total monthly expenditure of households on

consumption expenditure per household and on various commodities which includes education,

health, transport, energy and food items.

6

Chapter 3: Outlines the research methodology used and describes the field study, which includes

research design, study scope, source of data and method of data collection, sample size, survey

and sampling design, research instruments, data entry and analysis to achieve the objectives of

the study, mathematical equation and description of the variables.

Chapter 4: Provides analysis results and findings on social and demographic characteristics as

well as on various selected items like education, health, food, energy and transport.

Chapter 5: Presents the conclusions and recommendations of the study.

7

Chapter 2

Review of Literature

2.1 Introduction

This chapter reviews previous studies on the expenditure patterns and ways of households

spending conducted by various organizations and individuals in Uganda over the past decade. It

presents the findings from past studies on income level, consumption expenditure patterns on

health, travel, energy, education and food items.

2.2 Household Income and Consumption Expenditure

The monthly consumption expenditures per household for the year 2002/2003 and 2005/2006

after adjusting for inflation were $56.9 and $63.4, respectively. Thus, the average monthly

household expenditure increased by 11.4% within this three-year period. The increase was

mainly driven by the change in rural areas which recorded an increase of 14.4% while that of the

urban areas registered an increase of only 4.2% over the same period, according to UBOS

(2009).

According to USAID (2010) the average monthly household consumption expenditure in

Northern Region was estimated at $30.33 (i.e. 72,800 Uganda shillings) which was lower than

the national average monthly consumption expenditure of $58.04 (i.e. 139,300 Uganda shillings)

recorded in UNHS 2002/2003 by UBOS. The average consumption expenditure per urban

household is reported to be more than double that of the rural households. Choice and patterns of

expenditure also differ for urban dwellers. They spend more on education, health, rent, fuel,

energy, transport and communication, compared to their rural counterparts. In his study on broad

consumption expenditure pattern of Ugandan households, Gardner (2005) reveals that

8

expenditure on food and non alcoholic beverages dominated Ugandan household expenditure

with over 40% of total consumption expenditure going on this item. One in five Ugandan

shillings was spent on housing whereas transport accounted for 6% of total household

consumption expenditure. At the other end of the spectrum, they spend close to 0% on recreation

and culture.

2.3 Household Expenditure on Health

The poverty status report (2005) reveals that 16.3% of Ugandan households identified health

related problems as the most critical factor influencing welfare reductions. This evidence is

further corroborated by UBOS (2005/2006), which indicated severe problems in health facilities,

together with the inadequate provisions of safe water and poor hygiene and sanitation practices,

amongst the three most severe drivers of poverty at community level. In 2005 and 2006, 40.4%

of Ugandans reported being sick during the UNHS-III recall period by UBOS, and that both men

and women appeared to prefer private health providers to public facilities. Moreover, the study

indicated that health care demand increases with income: 91.4% and 84.4% of households in the

wealthiest and poorest welfare quintiles, respectively, sought treatment when ill. On the income

side of things, 49% (74.2%) of individuals from households in the poorest (wealthiest)

expenditure quintile seeks treatment from private providers when ill. Within the bottom

expenditure quintile, more men (51.3%) than women (47.1) rely on private health care facilities

when unwell and 12.5% of Ugandans do not seek treatment when ill. Gardner (2005) also said

Ugandans spend 4% of their total expenditure on health.

9

2.4 Household Expenditure on Education

Since the establishment of UPE in 1997, primary school enrolment increased from around 3

million pupils in 1997 to 7.5 million pupils in 2003, and over 7.6 million in 2005 /2006. Such

remarkable achievements were reflected in net enrolment rates, displaying constant increases

from base line level of 60.9% in 1992/1993 to 82.5% in 1999/2000, 84.5% in 2002/2003 and

84.9% in 2005/ 2006. By 2005/ 2006 the net enrolment rates for boys and girls stood at 85% and

84.9%, respectively. Among the poorest (wealthiest) quintile, the figures stood at 78% (90%) for

boys and 78.3% (89.8%) for girls, while for rural (urban) net enrolment rates for boys and girls

peaked at 84.4% (88.7) and 84.3% (89%), respectively. According to the baseline integrated

household survey of 2005/2006 children from the poorest and the wealthiest households, there

was an increase in the figures from 71.9% and 87.8% in 1999/2000 to 75.8% and 90.2 in

2002/2003, respectively. This shows poor households lagging as stated by MoFPED (2008).

Generally Ugandan households spend a relatively large proportion of consumption expenditure

on education (8%) which is one of the highest expenditure levels of the countries examined by

Gardner (2005). The countries studied are Republic of Korea, France, Finland, Argentina,

Mexico, Bulgaria and Uganda.

2.5 Household Expenditure on Energy and Transport

Ugandas annual per capita expenditure on energy is about $666.7 among the urbanized

population, and this represents about 15% of their total expenditure, according to a study

conducted by Bacon et al. in the year 2005-2006. They also indicated that in urban areas of the

countries studied the average monthly expenditure (including non purchased food) is about

$343.75. However, this figure is even higher in Uganda than in other countries like Kenya and

Pakistan. Uganda has a total share of households expenditure of 0.4% on electricity, 1.7% on oil

10

and gas, 4.4% on biomass and 2% of household expenditure is on transport and 29% on

purchased food.

11

Chapter 3

Research Methodology

3.1 Introduction

This chapter describes the research methodology adopted for this study. The procedure followed

reflects the aim and objectives of the study as defined in Section 1.4. The chapter provides the

methods and techniques used for the research design, sampling design, field surveys, data

collection and processing.

Figure 3.1; Flow diagram illustrating the overall research methodology

Start Start

Definition of problem, aim and objectives

Determination of data sources and study area

Sampling and Design of field study

Data collection and processing

Results of the analysis and findings

Conclusions and recommendations

Review of relevant literature to the study

Data analysis and presentation of results

End

12

Chapter 1 dealt with definition of research problem, aim and objectives and chapter 2 presented

the literature review.

3.2 Determination of data sources and Study Area

Amuru District was established by the Ugandan Parliament in 2006. The district was part of

Gulu in Acholi sub- region northern Uganda, Acholi is the main ethnic group living in the

district and they speak acholi as their local language. The population of the district is about

242,300 with most of the population being rural of over 95%. The district population is growing

at an estimated annual rate of 3.5%., the district has four (4) sub counties ( i.e pabbo, kilak,

Amuru and Atiak). Amuru District is bordered by Adjumani District to the north, Southern

Sudan and Lamwo District to the northeast, Gulu District to the east, Nwoya District to the

south, Nebbi District to the southwest and Arua District to the west. Amuru sub-county has an

estimated population of about 35,134.The major economic activities being Subsistence

agriculture as the backbone of the district economy, employing 98% of the population. Arable

land, which makes up about 90% of the total land area in the district, is very fertile. However,

during the last twenty (20) years, less than 1% of the land was utilized for agriculture on account

of insecurity caused by the LRA. With the return of security to northern Uganda in 2006/2007,

the situation in the district is expected to improve. The main source of data was the household

heads in the district that provided the data for this study.

13

3.3 Sampling and Design of field Study

Assuming 95% confidence level the sample size N was estimated using Equation 1:

n = (z2p*q)/d

2 .(3.1)

= (1.962*0.5*0.5)/(0.11

2)

= 80

Where n = the sample size

z = value at 5% level of significance read from the normal table

P and q = the probabilities each assumed at 0.5, and

d = the allowable standard error of 11%

The value of sample size n is computed to be 80; therefore 80 households were selected

randomly from the villages in the two parishes in Amuru Sub-County.

The survey used the face-to-face interview method. The two parishes of sub- County (Toro and

Pagak) are the domains of the survey. Each of the parishes was divided into 2 strata/villages.

Each stratum was defined by their geographical location, accessibility and economic activities of

the households such as farming and cultivation, local brewing, brick laying among others as their

source of income.

Within each stratum a sample was selected independently. First, enumeration villages were

drawn from each stratum using Proportion Probability to Size (PPS) sampling. Thus, the larger

the enumeration village size, the higher its probability of selection. Updated household lists for

the selected enumeration villages were produced. From each selected enumeration village of

Aywee, Olwal, lokaolik and Laboongogali.

14

80 households were systematically selected using a random start sub county wide for survey.

One enumerator is assigned to two villages. About 2.8% sample was selected for the survey.

However, the final responding sample size was equal to 80

households sub countywide which were considered to be sufficiently homogenous. The table

below shows the original and final sample representation.

Table 3.1; Sample Selection and Distribution from the two Parishes in Amuru Sub-County

3.4 Data collection and Processing

A field survey was under taken in Amuru district in the sub county of Amuru in February 2011.

The field study was designed using social scientific sampling methods. The field work included

the use of questionnaires with questions for the respondents to answer detailed in appendix A

and conducting interviews with the local household heads. Data and information were collected

on issues related to the economic income earning activities, like subsistence farming, brick

laying, local brewing, informal trading among others, the households monthly expenditure on

selected items such as education, transport, health, energy and food. Data were obtained from

Parish Village Estimated Population

Sample Household

Sample Fraction

Toro Aywee 800 26 0.033

Olwal 630 14 0.022

Pagak Laboongogali 980 30 0.031

Lokaolik 430 10 0.023

Total 2840 80 0.028

15

household heads of different age groups, gender, occupation and qualifications as given in

appendix B.

Households were visited from their respective local residence and interviewed while those who

were able to read and write filled the questionnaires by themselves, all necessary information for

the study was included in the questionnaire by the household heads.

The data and information given included both quantitative ( i.e age, house size and expenditure

figures) and qualitative data sets

In this research the following tools were vital papers, pens, pencils, rubber, laptop, an umbrella,

ruler, clip board, raincoat in case of heavy down pour, a bag for keeping all the necessary tools

and a dairy. The data collected from the various household heads were processed in to suitable

formats

3.5 Data Analysis and presentation of results

After collecting all the necessary information from the various sources including the household

heads, Epidata was used to capture/enter the data from the questionnaires. Since it focuses on

data entry and documentation of data, the summary of data table was exported to SPSS and the

bases of most of the analysis were chi-square test and ANOVA to compare and relate whether

there are differences in the expenditure patterns among the different households with respect to

their social and demographic characteristics. The results is also presented using a mathematical

model to determine the impact of the independent variables mainly the demographic

characteristics like age, sex, household size, education level and marital status of the household

heads on the total expenditure of the household.

16

3.5.1 Empirical mathematical impact model Specification

The model used to determine the proportionate impact of the social and demographic

characteristics of household heads on the households total expenditure is expressed by Equation

3.2:

Yk = 1c + 2a+ 3m + 4h + 5e +ui .. (3.2)

Yk= expenditure of kth

household, k=1, 2... n

is = proportionate contribution of characteristics of household heads on expenditure for i=1,

25

Where; c, a, m, h and e are characteristics of household heads

c = sex

a = age

m = marital status

h = household size

e = education level

ui = disturbance term

3.5.2 Description of Variables in the Econometric Model

1. Dependent Variable

In this analysis the total household expenditure on every item (Y) is the dependent variable.

Where expenditures of the different households are captured in Uganda shillings using a recall

period, per month, other periods like per term, per semester, weekly and daily.

17

2. Independent Variables

The independent variables in this case are household size that is the number of people living

under one roof, the sex of the person recognized by the rest of the members of the household to

be the head and often he or she is responsible for financial support and welfare of the members,

education level of the head which is also believed to affect the total household expenditure,

marital status of the head and age of the household head.

3.5.3 Cross Tabulation Technique

Cross-Tabulations was also used to show the relationships between responses made for any two

survey questions where a matrix display of the categories of two nominal scaled variables are

made, containing frequency counts of number of subjects in each bivariate category, and the

responses from any two questions are displayed in a table form. For each choice for the first

question a table for the question pair is created, the totals for all choices of the second question

are also found. Topic phrases was entered with the survey questions and used with the column

and row headings, the tabulation counts, and row and column percentages is displayed to show

response percentages with respect to the questions of interest.

18

Chapter 4

Results of the Analysis and Findings

4.0 Introduction

This section present the results of analysis of the responses in line with their expenditure patterns

and demographic characteristics like age of household heads, household size, sex of the

household heads, marital status and level of education of the household heads of the sampled

population and interpretations.

4.1: Background Characteristics of the Respondents

The minimum age of the household heads in the sample is 19 years with the maximum age

being 80 years and the average age of all the household heads in the sample population is 45.44

years.

The average household size is found to be 7.98 persons with the least household size having 3

people and the largest being 32 people.

19

Table 4.1; Percent and Frequency Distribution of the Household Heads by Social

Demographic Characteristics

Variables Frequency Percentage

Sex

Male 60 75.0

Female 20 25.0

Total 80 100

Marital Status

Married 58 72.50

Single 9 11.25

Separated 5 6.25

Divorced 2 2.50

Widow 6 7.50

Total 80 100

Highest level of Education

None 7 8.75

Primary 42 52.50

Secondary 21 26.25

Collage 7 8.75

University 3 3.75

Total 80 100

Source of Income

Wages and salaries 21 26.25

Cultivation and farming 36 45.0

Trading 13 16.25

Other 10 12.50

Total 80 100

Source: This study (2011)

The table above shows that 25.0% of the respondents were females and 75.0% were males.

72.5% of the household heads are married and are the majority, 7.5% are widow, 2.5% have

divorced, and 6.25% have separated while those that are single constitute 11.25%.

Those household heads who never went to school are about 8.75%, those who went to primary

school are about 52.50% of the sampled population which were the majority, also 26.25% of the

20

samples went up to secondary level, while those who attended collage training constitute about

8.75% and about 3.75% studied up to university level.

Also 26.25% earn wages and salaries, 45% get their income from farming and cultivation, those

who earn from trading are 16.25% and 12.50% earn from other sources. Details of these are in

appendix B.

4.2 Dependence of Household Expenditure on Demographic Characteristics of the

Household Heads

Household expenditure pattern is found to vary from one household to another (p0.05), since there is no enough statistical evidence provided for conclusions that the

expenditure depends on the sex, age, and marital status of the household head

The level of education of the household head is found not to be the main determinant of a

households monthly average expenditure (p>0.05) since most of the household heads almost

have the same level of education attainment

4.3 Economic Impact of Characteristics of Household Heads on Expenditure Pattern

Using the basis of mathematical model (2). The household size, age, sex, level of education and

source of income of the household head have positive impact on the households total

expenditure while the marital status of the household head has a negative impact. Change in

marital status of a household head reduces the households expenditure by 12%. As given by

equation 4.1 below;

Yk=0.02c + 0.21a - 0.12m+ 0.16h + 0.10e .. (4.1).

21

When the level of education of the household head changes the average expenditure of the

household will increase by 10%. Increase in the age of the household head leads to increase in

expenditure by about 21%. While increase in the household size by one person increases the

households expenditure by 16%.

Therefore as ones age increases the household size also increases and highly educated household

heads spend more compared to those of other levels, those households with many members also

spend more than those that are few. Household heads characteristics like sex, age, marital status,

education level and household size determines the households expenditure by over 61%.

4.4 Expenditure Patterns by Demographic Characteristics of Household Heads

The male and female headed households have no significant difference in their average monthly

expenditure (p>0.05). However there are small differences as given in appendix C

The average monthly expenditure among those household heads that are married, single,

separated, divorced and widows are found to be statistically not significantly different (p>0.05).

No significant differences were also found in the average expenditure among the different age

groups of the household heads (p>0.05).

There is also no statistical significant difference in the average monthly expenditure between

those household heads who have not studied and those who studied to various levels (p>0.05).

However there are differences in the average expenditures between those household heads that

stop at different levels,. Household heads that completed university level have greater average

but statistically there is no enough evidence for concluding that they spend more than others. For

details see appendix C.

22

The average expenditure among public servants are found to be different from those who earn

from other sources (0.041=p0.05). The study also found out that household heads aged 35-54 spend more than those other

age groups as given in appendix C.

4.5 Average Expenditure on the Items

Figure 4.1; Expenditure Patterns on selected Items

23

Source: study survey Amuru 2011

Note:

Exchange rate; 1 US dollar=2400 Uganda shillings

4.5.1 Expenditure on Education by the Households

The per capita expenditure on education is 142,200 Uganda shillings equivalent to $59.25 per

term irrespective of the status of the household head per term while the average expenditure on

education per semester is at $20.83 though there are very few households with members at high

institutions of learning and constituted about 40% of their total expenditure per quarter and the

expenditure also depended on the number of persons going to school from a certain household,

those households with few members going to school spend less compared to households with

many members.

Education is found to constitute the majority proportion of the total households expenditure and

equally spent on by the households, This is because of high fees and cost of acquiring scholastic

24

materials though the government had come up with education policies like UPE and USE but

still the households spend money on education.

4.5.2 Food Expenditure by the Households

The average household expenditure on food per month is found to be at 83,050 Uganda shillings

about $34.6 for both male and female headed households irrespective of the level of education,

marital status and occupation of the household head, this constitute about 23.15% of their

monthly expenditure. While 58.8% of the households produce their own food with 40.2%

purchasing food from the market. Food items are found to be the second item most spent on by

the households. The female headed households spend more on food than the male headed

households, because they care more about the welfare of their households.

Currently food prices have become increasingly high hence enabling most households to spend a

lot on it in order to meet their needs to eat well. A good number of people also purchase food

from the market even those who produce their own food will still have to spend money to buy

other food items like cooking oil, onion and tomatoes on daily and weekly basis this also

increase their monthly expenditure on food.

4.5.3 Households Expenditure on Health

Per every 10 households there are at least 3 sickly people and it is found that most of the

households do not spend money on health services and on average it constitute about 2.56% of

their total expenditure, there was also no difference in the average expenditure between male and

female headed households on health services. This is relatively very small compared to

expenditure on education and food item. The households spend about 8,800 Uganda shillings

25

equivalent to $3.67 on health services per month with some households spending zero Uganda

shillings where as others spend as much as $25 per month.

It is also found out that total expenditure on health services depends on the number of sick

people in a household and also the kind of disease a person is suffering from. This does not

depend on the occupation of the household head at 5% level of significant. The study also

reveals that households with no sick people do not spend money on health while those who have

at least one person will have to spend at least some money.

4.5.4 Households Expenditure on Energy and Transport

On average expenditure on fuel, charcoal and firewood is at $6.79 monthly about 4.71% of the

households total expenditure. This is also relatively low compared to that of other items and

services like education and food. They spend on paraffin and for exceptional cases spend on

charcoal and it is found out that the households spend $7.75 on average on travelling every

month constituting 5.26% of their total monthly expenditure this is also slightly low in

comparison because most households use other means to move like bicycles while travelling

long distances while others go on foot therefore they do not incur transport cost. The female

headed households spend more on energy and travel than the male headed households and those

that are educated spend more on travelling. And on energy there is no significant difference in

their spending.

4.6 Summary

This chapter has analyzed the results, findings and interpretation of the results from the data of

the expenditure patterns by social, economic and demographic characteristics of the household

26

heads as well as expenditure patterns on each of the selected items such as education, health,

food and others. Details are in appendix C.

Chapter 5

Conclusions and Recommendations

5.1 Conclusions

The expenditure patterns among the various groups of demographic characteristics of household

heads did not show much difference in their average monthly expenditures. However there are

certain groups of households who had greater average expenditure like those whose heads have

studied university, public servants, females on some items like food and those divorced, those

27

household heads aged between 35-54 also have greater average expenditure. Generally the total

average monthly expenditure was high of about $139.6 equivalent to 335,050 Uganda shillings

and this was not determined by the social and demographic characteristics of the house hold

heads and the sizes of the household. The households spend mostly on education and food

mainly because of inflationary tendencies which tend to make food prices and prices of other

items to rise and because there are no substitutes for some food items, though they have

opportunity cost of consuming them, and spent less on items which do not require money to

consume like water.

5.2 Recommendations

In order to reduce the high monthly, termly and quarterly expenditures on commodities like

education and food, there should be good and better implementation of the education policies

like UPE and USE because the policies seems not to be operating well and the cost of scholastic

materials should likewise be reduced to enable parents acquire them easily and at lower prices,

inflationary policies should also be put in place through monetary regulations in the economy in

order to avoid the over increasing food prices and depreciating Uganda shillings against US

dollars, this will enable household heads to purchase food items cheaply and at lower cost there

by reducing on their monthly expenditures. Infrastructures such as schools, hospitals and better

road networks should also be constructed closer to the people in order to reduce the costs

incurred by the households in seeking the services far. Taxes should be levied minimal on both

the producers and consumers in order to avoid consumer exploitation and fuel tax should also be

reduced since its the determinant of the market supply in most economies.

28

References

Bacon, L. Bhattacharya, S. Kojima, M. June 2010. Expenditure of low income households on

energy Evidence from Africa and Asia. The World Bank

Egypts Household Expenditure Pattern: Does It Alleviate a Food Crisis? Jacinto F.

Fabiosa and Soliman, I. Working Paper 08-WP 475 August 2008

Gugarati: Basic Econometrics, fourth edition, The McGrawHill Companies, 2004

Household income and expenditure statistics (HIES): A comparison of eight countries. Peter

Gardner (ILO consultant) 2005, LABORSTA (http://laborsta.ilo.org/).

Household income and Expenditure survey Analysis report, federation statesof Micronesia,

2005.

Income & Expenditure Patterns Of Older Persons A National-level Study By Agewell

Foundation. PRLog (Press Release) Apr 27, 2010 http://prlog.org/10649800

Maliwichi, L., Bourne, L., Mokoena, L. 2003 Expenditure patterns on food and non food

items of Khayeliha households, western Cape, south Africa. Abstract International Journal

of consumer studies 27(3): 227

29

Ministry of finance, planning and economic development (MoFPED) 2008, Poverty action

fund (PAF) reform

UBOS (Uganda Bureau of Statistics).2006.Uganda National Household Survey2005/2006:

Report on the socio-economic module. Uganda Bureau of Statistics, Kampala

Uganda bureau of statistics: Statistical Abstract 2009

USAID Uganda: Northern Uganda water supply services (NUWATER) baseline survey of water

supply systems and services in kitgum February 2010

30

Appendices

31

Appendix A

HOUSEHOLD QUESTIONNAIRE ON SOCIO- ECONOMIC AND DEMOGRAHIC

CHARATERISTICS

INTRODUCTION

Hello. My name is ______________, and am a student at Makerere University and I have come

to carry out a survey

The purpose of the survey is to get information about your expenditure and socio demographic

characteristics. Responses given will be kept confidential and shall be used only for academic

purpose your co-operation is highly appreciated.

SECTION 100 HOUSEHOLD IDENTIFICATION PARTICULARS

101. Questionnaire number

102. District

103. Sub county

104. Parish village

105. Household sample number

106 Respondents name

107 Date of interview

Location of Interview

108 ward=LC2

109 cell=LC1

32

SECTION 200 BACKGROUND CHARACTERISTICS

201. Gender (sex) of the Household head? 1. Male 2. Female

202. How old are you? Years

203. What is your marital status?

1. Married 2. Single 3. Separated 4. Divorced

5. Widow

204. How many people are in your household?

205. How do you obtain the main food items for your household? 1. Own produce

2. Relief 3. Purchase from market 4. Gift from relatives/friends in the

village

5. Others

206. What is your highest level of education? 1. None 2. Primary

3. Secondary 4. College training 5. University 6. Other

207. How many members of your household go to school?

208. Do you have any sickly person in your household? 1. Yes 2. No if yes how

many?

209. What is your occupation? 1. Peasant cultivation 2. Casual laborer

3.trader

4. Public servant 5. Other

210. What is your main source of income?

33

SECTION 300 HOUSEHOLD EXPENDITURE

How much do you spend on the following items? (In Uganda shillings)

Item Daily Weekly Monthl

y

Annually Other periods

specify

301 Buying food for the household

302 Health expenses

303 Travel expenses

304 School expense per term

305 School expenses per semester

306 leisure

307 Housing (e.g rent, repairs)

308 Fuel (firewood, charcoal,

paraffin, electricity)

309 clothes

310 Contribution to cultural

obligations (e.g marriage,

funerals)

311 Drinking and smoking

312 Water expenditure

313 Others expenses

Total expenditure

34

Final comments

312. Do you have any other comment s you would like to make on the expenditure?

Thank you, very much for taking your time to answer these questions

Comments by interviewer

Interviewers name

Supervisors name

Table 1

Source: This study (2011)

Appendix B

distribution of sex of household heads by highest level of education

Highest level of education

total none primary secondary collage university

Sex Male

Female

Total

6

1

7

30

12

42

17

4

21

6

1

7

1

2

3

60

20

80

35

Table 2: frequency distribution of sex of household heads by marital status

Marital status

total married single separated divorced widow

Sex Male

Female

total

52

6

58

6

3

9

1

4

5

0

2

2

1

5

6

60

20

80

Source: This study (2011)

Table 3distribution of household heads by sex and source of income

Source of income

total Casual work farming salary trading other

Sex male

female

total

11

2

13

31

5

36

5

3

8

8

5

13

5

5

10

60

20

80

Source: this study (2011)

36

Table 4Age Distribution of the Respondents

Age group Frequency

15-19 1

20-24 2

25-29 3

30-34 12

35-39 10

40-44 14

45-49 8

50-54 8

55-59 9

60< 13

Source: This study (2011)

Appendix C

Table 5Average expenditure by Age

Age group Expenditure (in US dollar )

15-34 $97.71

35-54 $233.35

55< $107.18

Source: this study (2011)

37

Table 6: Distribution of average expenditure by Demographic and Socio-Economic

characteristics of Household Heads

Sex of household head Average expenditure

(in US dollars)

Sampled

number

Male $137.83 60

Female $144.88 20

Total 80

Occupation of household head

Public servants $263.48 38

Casual workers $120.11 15

Farmers $125.30 12

Traders $182.45 7

Other $71.62 8

Total 80

Level of education of household head

None $200.77 7

Primary $119.29 42

Secondary $157.88 21

Collage $102.10 7

University $241.19 3

Total 80

Marital status of the household head

38

Married $153.58 58

Single $75.81 9

Divorced $84.06 5

Separated $306.44 2

Widow $91.11 6

Total 80

Source: this study (2011)

Table 7: average and percentage distribution of expenditure on selected items

Items Average expenditure (in US

dollars)

Percentage

Food $34.60 23.15

Education $80.08 53.60

health $3.67 2.45

Transport $7.75 5.26

energy $6.79 4.71

others 10.83

total 100

Source: This study (2011)

39