Estimation and Analysis of Determinants of Household Consumption in Iraq for the Period (2004 - 2015)

Abstract

The study examined the estimation and analysis of the variables in consumption due to the economic and political changes that took place in Iraq after 2003, which affected consumption. The Autoregressive Distributed Lag Model (ARDL) methodology was used to estimate the relationship in the short and long terms. The research concluded that consumption is determined by the following variables: population, savings, inflation rate, disposable income with four optimal slowdowns Explains about 99% of changes in household consumption. The results showed that there is a long-term equilibrium relationship (common integration) that moves from the explanatory variables to the dependent variable (ARDL). The calculated F is greater than the critical values (minimum and maximum). The value of the error correction coefficient indicates that 35% of short-term errors are automatically corrected to achieve long-term equilibrium at a level below 1%. The effect of the variables on population, disposable income, inflation rate, savings on household consumption in the short term (35%) for all variables of the overall effect was also affected. The results also showed that the structural stability of the model transactions in the short and long term under the CUSUM -USUSUM SQ). The results also showed that the model has a high predictive capacity (Theil).