Rural-urban dualism the consumption behavior of Kenya households

Abstract

The Integrated Rural Survey, 1974-1975 and the Urban Food Purchasing Survey, 1977 are analysed separately to test the hypotheses: first, that urban marginal propensity to consume is lower than the rural marginal propensity to consume, and second that the urban marginal budget share for non-food is higher than the urban marginal budget share for food, and that the rural marginal budget share for food is higher than the rural marginal budget share for non-food Ideally, especially given a proper data base) the theory that the marginal propensity to consume and the marginal budget share for food are higher for the rural sector than they are for the urban one. The marginal propensity to consume and the marginal budget share calculated and analysed separately for both urban and rural data in this study, do not argue strongly for the hypothesis, but one fact is strongly supported, that the higher the income, the lower the marginal propensity to consume in total and for food for both sectors. The marginal budget share also declines with rise in income for both sectors. The major deciding factor in the consumption of the households in both sectors is income,