An Intertemporal Analysis of Households Consumption Decisions Among Staff of University of Uyo, Nigeria

Abstract

This study explores the factors shaping how staff of the University of Uyo make intertemporal consumption choices. Data were gathered from 37 respondents across academic and non-academic units, covering their current and expected income, years of service, age, savings plans, present and future consumption, and utility rankings. Using this information, intertemporal consumption, savings, and utility functions were estimated for two periods: the present period, defined by each respondent’s current rank and income, and the future period, tied to their next promotion and expected earnings. The findings reveal that current income and age play central roles in influencing both consumption and saving behavior. Evidence from the Euler equation suggests that the expected marginal utility of future consumption exceeds that of the present, implying a stronger incentive to save now for higher future satisfaction. The study highlights the importance of sound financial planning and supportive welfare policies to promote smoother consumption over time.