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Impact of Economic Indicators on Household Consumption in Algeria: A Principal Component Approach

Year: 2025

Type: article

Abstract: : This study focuses on key economic indicators that significantly influence household consumption, employing Principal Component Analysis (PCA) techniques in R Studio to identify and extract the most critical indicators contributing to household consumption. It also examines the relationships and correlations between these indicators and household consumption. The analysis explores temporal trends and changes in household consumption alongside economic indicators such as oil prices, inflation rate, unemployment rate, real effective exchange rate index, government expenditure, and disposable household income. Findings indicate a continuous increase in household consumption over time. Moreover, results reveal a positive relationship between household consumption and variables such as disposable household income, government expenditure, oil prices. Conversely, the analysis highlights a negative relationship between household consumption and variables such as inflation rate, unemployment rate, and the real effective exchange rate index. Keywords: Household Consumption, Economic Indicators, Principal Component Analysis (PCA), Algeria JEL Classification Number: D13, D10, C80

Source: Zenodo (CERN European Organization for Nuclear Research)

DOI: 10.5281/zenodo.15314078

Authors: Magoura Khaled, Said Imane, Hakim Nadjib Allah

Institutions: University Centre of Maghnia, Centre de Recherche en Économie Appliquée pour le Développement

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: No poverty

Open Access status: green

OpenAlex ID: W6949485844

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