An Analysis of the Effect of Fuel Subsidy Removal on Residential Location Preferences among Middle-Income Earners in Abuja, Nigeria

Abstract

The removal of fuel subsidies in Nigeria has resulted in spectacular socio-economic change that has implications for middle-income households, particularly in urban areas such as Abuja. This research examines the policy reform's impact on choice of residential location, with particular emphasis on the wider implications for household decision-making in a context of increasing fuel prices. The research seeks to evaluate the impact of fuel subsidy removal on house choice, travel behavior, and welfare of middle income earners in Abuja. Hypotheses were formulated on the impact of subsidy removal on residential choice, the moderating effect of socio-demographic characteristics, and migration towards lower-cost residential zones. A mixed-method strategy was used in data collection. 300 copies of structured questionnaire were administered to middle-income earners resident in different neighborhoods of Abuja, out of which 208 questionnaires were duly completed and retrieved. Findings indicate a strong negative correlation between Fuel subsidy removal and residential choice of location, and with respondents demanding more low-cost housing. Socio-demographic factors, including age and earnings, also work towards mediating such tastes. Proper planning and policy action are proposed to redress such concerns by the study in favor of measures like low-cost housing development, enhanced public transport, and directed subsidy options. Policymakers must include these factors while planning towards a more inclusive cityscape responsive to the concerns of middle-income residents changing in line with economic transformation. Further research is called for to explore long-term impacts and other controls on household decision in the changing urban environment.