Determinants of Household Consumption Expenditure: A Case Study of India

Abstract

Household spending constitutes a central driver of India’s economic activity, making it important to understand the factors that shape consumption choices across diverse population groups. This study investigates the major economic and socio-demographic influences on household consumption behavior in India, examining elements such as income, family composition, saving habits, education, employment conditions, inflationary pressures, and access to financial services. Using a combination of primary information and secondary data, the analysis compares patterns in rural and urban settings to identify how these determinants operate in different contexts. The results indicate that income levels and household size consistently exert strong effects on expenditure decisions, while education, job stability, and price changes also play significant roles. Insights from the study can assist policymakers in designing measures that strengthen household welfare and support sustainable, consumption-based economic growth.