Determinants of Household Conspicuous Consumption on Wedding Ceremony in Adi-Keih, Eritrea

Abstract

The level of household consumption expenditure indicates and is critical for enhancing the level of economic development as well as the wellbeing and wealth of societies. Conspicuous consumption, one component of the household consumption expenditure, includes the practice of purchasing goods or services for public display of wealth or status-seeking rather than covering basic needs and is common practice in developed and developing economies. One form of conspicuous consumption, households engaged in, is the extravagant spending on wedding celebrations, which have grown prohibitively expensive over time. The study, based on an OLS model, tries to investigate the determinants of household conspicuous consumption on a wedding ceremony in Adi-Keih town, Eritrea. The result of the study, based on household survey data, shows that on the average, households spend more than twice of their annual income on the wedding ceremony. Moreover, it reports that age, religion and level of education of the head of household, the total yearly income of the household, and financial support from abroad have significant effects on the level of conspicuous consumption on wedding ceremony. Based on these, policies on how to minimize the disproportionately large amount of spending that is diverted to signalling status are recommended.