Rural and urban household consumption patterns in Tanzania: A consumer theory analysis of determinants

As Tanzania experiences significant economic transformation, understanding household consumption behaviors is crucial for formulating effective micro-economic policies that enhance welfare and promote sustainable growth in both rural and urban areas. This study investigated the determinants of household consumption patterns using simultaneous quantile regression model. By integrating consumer’s theory with empirical analysis of determinants, this study contributes to the existing literature on households’ consumption economics and provides actionable insights for policymakers and stakeholders aiming at fostering equitable economic development. The findings indicate that, income positively influences consumption patterns across all quantiles, that is at 25 ^th , 50 ^th and 75 ^th quantile respectively in rural and urban areas. Notable differences emerge, with urban households displaying diverse consumption behaviors linked to higher incomes and greater access to goods, while rural households depend on agricultural production and spend a larger share of their income on food, facing constraints like limited savings and market access. Additionally, high utility costs negatively impact consumption patterns by about 74 percent subject to effect variation depending on the location (rural or urban). The study underscores the significance of socio-economic factors, such as gender and family structure, in household decision-making and highlights the influence of external factors like economic policies and infrastructure on consumption choices. It calls for targeted policies to improve market access, enhance consumer education, and support local production to bridge the consumption gap between urban and rural households, emphasizing the need for inclusive economic policies tailored to the diverse needs of Tanzanian households.