You are on page 1of 48

ANALYSIS OF HOUSEHOLD EXPENDITURE PATTERNS

IN AMURU DISTRICT
(A Case study of Amuru sub-county)

By
Omony Nobert

August 2011

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.

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

ii

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.

iii

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


iv

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

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

vi

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

vii

viii

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.

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
2

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.

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

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.

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.

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
7

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.

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
9

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

10

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.

Start
Definition of problem, aim and objectives
Review of relevant literature to the study
Determination of data sources and study area
Sampling and Design of field study
Data collection and processing
Data analysis and presentation of results
Results of the analysis and findings
Conclusions and recommendations
End

Figure 3.1; Flow diagram illustrating the overall research methodology

11

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.

12

3.3 Sampling and Design of field Study


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

= (z2p*q)/d2

.(3.1)

= (1.962*0.5*0.5)/(0.112)
= 80
Where

= the sample size

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

P and q
d

the probabilities each assumed at 0.5, and

= 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.

13

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

Parish

Village

Toro

Aywee

800

26

0.033

Olwal

630

14

0.022

Laboongogali

980

30

0.031

Lokaolik

430

10

0.023

2840

80

0.028

Pagak

Estimated
Population

Total

Sample
Household

Sample
Fraction

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
14

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.

15

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.
16

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.

17

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.

18

Table 4.1; Percent and Frequency Distribution of the Household Heads by Social
Demographic Characteristics
Variables
Sex

Frequency

Percentage

Male
Female
Total
Marital Status
Married
Single
Separated

60
20
80

75.0
25.0
100

58
9
5

72.50
11.25
6.25

Divorced

2.50

Widow
Total
Highest level of Education

6
80

7.50
100

None
Primary
Secondary

7
42
21

8.75
52.50
26.25

Collage

8.75

University
Total
Source of Income
Wages and salaries
Cultivation and farming

3
80

3.75
100

21
36

26.25
45.0

Trading

13

16.25

10
80

12.50
100

Other
Total
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
19

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 (p<0.05) which
depends on the household size and source of income of the household head. It is also found that
the households total expenditure do not depend on the sex, age, marital status of the household
head (p>0.05), 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).
20

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.

21

The average expenditure among public servants are found to be different from those who earn
from other sources (0.041=p<0.05) while among other groups like peasant, casual workers,
traders and public servants there is no significant difference in their average monthly expenditure
(p>0.05). 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

22

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

23

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

24

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
25

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

26

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.

27

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

28

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

29

Appendices

30

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

105.

Household sample number

106

Respondents name

107

Date of interview

village

Location of Interview
108

ward=LC2

109

cell=LC1

31

SECTION 200 BACKGROUND CHARACTERISTICS


201.

Gender (sex) of the Household head?

202.

How old are you?

203.

1. Male

2. Female

Years

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?


3. Secondary

207.

4. College training

1. None

2. Primary

5. University

6. Other

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
210.

5. Other

What is your main source of income?

32

SECTION 300 HOUSEHOLD EXPENDITURE


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

Daily

Weekly

Monthl
y

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,

Annually

Other

periods

specify

charcoal,

paraffin, electricity)
309

clothes

310

Contribution
obligations

to
(e.g

cultural
marriage,

funerals)
311

Drinking and smoking

312

Water expenditure

313

Others expenses
Total expenditure

33

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

Appendix B

distribution of sex of household heads by highest level of education


Highest level of education
none
Sex

Total

primary

secondary

collage

university

total

Male

30

17

60

Female

12

20

42

21

80

Source: This study (2011)


34

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


Marital status

Sex

married

single

separated

divorced

widow

total

Male

52

60

Female

20

58

80

total

Source: This study (2011)

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


Source of income

Sex

Casual work

farming

salary

trading

other

total

male

11

31

60

female

20

13

36

13

10

80

total
Source: this study (2011)

35

Table 4Age Distribution of the Respondents


Age group

Frequency

15-19

20-24

25-29

30-34

12

35-39

10

40-44

14

45-49

50-54

55-59

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)

36

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


characteristics of Household Heads
Average expenditure

Sampled

(in US dollars)

number

Male

$137.83

60

Female

$144.88

20

Sex of household head

Total

80

Occupation of household head


Public servants

$263.48

38

Casual workers

$120.11

15

Farmers

$125.30

12

Traders

$182.45

Other

$71.62

Total

80

Level of education of household head


None

$200.77

Primary

$119.29

42

Secondary

$157.88

21

Collage

$102.10

University

$241.19

Total

80

Marital status of the household head

37

Married

$153.58

58

Single

$75.81

Divorced

$84.06

Separated

$306.44

Widow

$91.11

Total

80

Source: this study (2011)

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


Items

Average expenditure (in US

Percentage

dollars)
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)

38

39