INFLUENCE OF HOUSEHOLD CONSUMPTION DECISION ON AGRICULTURAL PRODUCTION: EVIDENCE FROM LITERATURE

Abstract

Consumer decision is known to affect agricultural production in the sense that demand for (agricultural/agro-allied) products stimulate agricultural production. This paper use part of a larger study* in assessing the factors determining consumer demand decisions on small and medium scale firms’ cocoa beverages (SMECB) and the effect of improved SMECB characteristics on its demand level. Structured questionnaire was used in the study (in a multistage sampling technique) to collect data from 2,000 households in selected cities from ten States of Nigeria. Information sourced were on households’ socio-economic  arameters, prices and quantities of household commodities, as well as SMECB attributes. The analytical techniques used were descriptive statistics and multivariate Probit model. On the average, male-headed households demanded 231.3g and female-headed households demanded 201.4g of SMECB
monthly. Factors that significantly influenced the probability of respondents’ consumption decision on SMECB were region (p<0.05); SMECB attributes, educational status and age (p<0.01); price of tea beverage and year of residency (p<0.1). Increased SMECB consumption in Nigeria could be enhanced through product development, thereby increasing domestic consumption of cocoa and investment in the Nigerian cocoa sub-sector.