Stochastic Processes In Economic Forecasting: A Mathematical Perspective

Abstract

Due to the significant economic importance of the consumption topic, it has become one of the prominent issues in Algeria, receiving considerable attention from both the government and employers. It is considered a primary driving force for the economy The study' revolves around estimating the household consumption function in Algeria for the period (2006 – 2020). In order to test theoretical economic models and endeavor to construct a suitable model for household consumption in Algeria, we employed the standard analytical approach to analyze the estimation results. The main results obtained shows that an increase in income can lead to higher levels of household consumption. Families can afford more expenses and increase their purchases of goods and services also population growth can influence patterns of household consumption. An increase in the number of individuals in a household means higher daily needs and, consequently, increased consumption.