A Comparative Study of Consumption Pattern in Rural and Urban Pokhara

Abstract

he study entitled “A Comparative Study of Consumption Pattern of Rural and Urban Pokhara.” has been carried out in partial fulfillment for the degree of Masters of Arts in Economics. This study is based on primary data and collected from two wards of Pokhara Sub-Metropolitan City i.e.Ward-10 (Urban Ward) and Ward-14 (Rural Ward). The sample wards have been selected purposelyon the basis of rural and urban characteristics.The main objectives of the study is to know the nature and pattern of consumption expenditure, estimateand test the consumption function and factors affects consumption expenditure in rural and urban settings.For the data collection structured interview schedule was used. Multiple regressions have been used to analysis the influence of independent variable on dependent variables. Here,household size,per capita income, education and remittance have been treated as independent variable while per capita consumption expenditure has been treated as dependent variable. Chi-square test has been used to find the test statistics between consumption and other variables (income, household size and occupation).Similarly pie chart has been used to find the consumption pattern. In the same way mean difference test has been used to find the difference in mean of rural and urban respondents.The model has been applied under linear and log linear forms. The linear model has been found significant for per capita income and household size in both rural and urban Pokhara. Similarly log linear model also found significant for per capita income and household size in both rural and urban Pokhara. As whole both the model are significant at 1 percent level of significance. Regarding composition, rural respondent spent more on food and non-food items than that of urban. Not surprisingly, urban respondent spend more on house rental relative to their rural counterparts. There is difference between consumption pattern of rural and urban respondents. The linear regression analysis shows that as the increase in one per capita income,consumption will increase seven percent more than urban respondent than that of rural respondent. Similarly, increment in one year of education will reduceper capita consumption in rural area but per capita consumption increases in urban areas.At last the study has been compared with Nepal Living Standard Survey 2010/11 report and found a huge difference between both.