Analysis of factors affecting household out-of-pocket expenditure in Uganda: a case study of Lungujja

Abstract

This study was carried out to investigate determinants that affect household out-of-pocket expenditure in Uganda using a case study of Lungujja. Both quantitative and qualitative research methods are employed to achieve the research objective. Emphasis was put on trying to establish the relationship between socioeconomic and demographic factors which included household disposable income which in this study considered as the income after tax (net income of the household from different source of income), family/household size - it is the total numbers of the household members, age of the household head, education level of the household head, and the saving status of the household. The validity and reliability of the research instrument (questionnaire) was established, and data was collected from 119 respondents selected randomly from youths living in Lungujja. The analysis of this data was done in three stages; the first stage involved univariate analysis using descriptive statistics such as mean, minimum, and maximum, the second stage involved bivariate analysis using the Pearson’s correlation coefficient to establish the nature of the relationship between the dependent variable and independent variables, and finally the third stage of analysis involved multiple linear regression analysis. This altogether formed the basis of the findings, conclusions, and recommendations for this study. According to the findings of this study, the following hypotheses were supported; household income was a significant determinant of household out of pocket expenditure, the household size (number for family members) is significantly associated with household out-of-pocket expenditure. On the other hand, education level of household head, age of the household head, gender of the household age and the saving status did not have significant impact on household out of pocket expenditure. However much as education level isn’t significant it tends to determine what financial decisions one is going to take hence could affect the household expenditure. The study offers the following recommendations: stakeholders should provide financial literacy xiii this will significantly reduce the amount of household out-of-pocket expenditure. Households should be taught of various saving habits to avoid spending more on irrelevant activities. Family planning practices such as condom use, and others are important to limit family size this will help to reduce consumption /household out of pocket expenditure. The government should design and implement policies that help increase disposable incomes of the households so that they work to get more money and make their standard of living better. Further research study could be conducted in other areas or districts comparison may be done for future policy formulation.