Econometric Analysis of Changes in Generation Z Consumption Patterns and Their Implications for Market Dynamics and Economic Growth in Indonesia

Abstract

This study aims to analyze changes in the consumption patterns of Generation Z in Indonesia and examine their implications for market dynamics and national economic growth through an econometric approach. Generation Z, as a group of digital-native consumers, shows different consumption preferences from previous generations, especially in terms of technology, sustainability, and the social value of a product. The data used in this study is sourced from the National Socioeconomic Survey (Susenas), Bank Indonesia Consumer Survey, and BPS macroeconomic data for the period 2010–2024. The econometric model used is Panel Data Regression (Fixed Effect Model) with the dependent variable being Generation Z's per capita consumption expenditure, while the independent variables include income, digital expenditure, inflation, and consumer confidence index. The results show that income and digital expenditure have a significant positive effect on Generation Z's consumption, while inflation has a significant negative effect. These findings confirm that changes in Generation Z's consumption patterns are driving market transformation towards a digital economy, which has implications for the growth of the service and technology sectors in Indonesia. which analyzes changes in Generation Z's consumption patterns in Indonesia by combining a literature and econometric approach. Time series data from 2010–2023 was used to test the effect of per capita GDP, inflation, and Gen Z population on their consumption. Regression results show that GDP per capita has a positive but insignificant effect, inflation has a significant positive effect, and Gen Z population has a significant positive effect. These findings confirm that, in addition to macroeconomic factors, Gen Z's unique digital-based consumption behavior creates new dynamics in the Indonesian market.