HOUSEHOLD CONSUMPTION EXPENDITURES IN TURKEY: A COMPARATIVE QUANTILE REGRESSION ANALYSIS

Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi • Cilt: 43 • Sayı: 1 • Haziran 2021, ISSN: 2587-2672, ss/pp. 179-196 DOI: 10.14780/muiibd.960326 ARAŞTIRMA MAKALESİ / RESEARCH ARTICLE HOUSEHOLD CONSUMPTION EXPENDITURES IN TURKEY: A COMPARATIVE QUANTILE REGRESSION ANALYSIS TÜRKİYE’DE HANEHALKI TÜKETİM HARCAMALARI ÜZERİNE KARŞILAŞTIRMALI BİR KANTİL REGRESYON ANALİZİ Gizem ACET DÖNMEZ* Hurşit GÜNEŞ** 1 2 Abstract Consumption is one of the key concepts in economics due to its animate connections with GDP, savings, and utility. The current study aims to analyse the relationship between household consumption expenditures and some household characteristics in Turkey through Household Budget Surveys of TurkStat for the years 2002 and 2018. With the implementation of quantile regression estimations, it is shown that disposable income emerges as a very important determinant of consumption expenditures as suggested by the conventional theories of consumption. Most of the households, who intensify their savings, especially to purchase real estate, reduce their consumption levels. It is also observed that the household-heads who are single or enjoy a higher level of education spend more. Although the age of the household head is positively associated with the level of consumption in 2002, this relationship seems to be reversed in 2018. Regarding economic growth trends in the Turkish economy, such an observation might support the lifecycle theory. The households who use credit cards and online shopping are associated with a higher level of consumption expenditure compared to those who do not use these opportunities. Keywords: Consumer Economics: Empirical Analysis, Quantile Regressions, Household Consumption JEL Classification: D12, C31 Öz Tüketim özellikle GSYH, tasarruflar ve fayda teorisi ile ilişkileri nedeniyle iktisat alanında çok önemli bir yere sahiptir. Bu çalışmanın amacı hanehalkı tüketim harcamaları ile bazı hanehalkı özellikleri arasındaki ilişkiyi analiz etmektir. Bu amaçla, TÜİK’in 2002 ve 2018 yıllarındaki Hanehalkı Bütçe Anketleri kullanılmıştır. Kantil regresyon tahminleri, kullanılabilir gelirin geleneksel tüketim teorilerinin de belirttiği gibi tüketim harcamalarını açıklayan çok önemli bir faktör olduğunu göstermiştir. Genel olarak, daha fazla tasarruf yaparak gayrimenkul satın alan hanelerin daha az tüketim yaptığı gözlenmiştir. Eğitim seviyesi daha yüksek * ** Res. Asst., Marmara University, Department of Economics, Istanbul, E-Mail: , ORCID ID: 0000-0002-3936-7147 Prof. Dr., Marmara University, Department of Economics, Istanbul, E-Mail: , ORCID ID: 0000-0003-2441-4171 Makale Gönderim Tarihi: 14.02.2021 Yayına Kabul Tarihi: 13.06.2021 179 Gizem ACET DÖNMEZ • Hurşit GÜNEŞ ve bekar hanehalkı reislerinin olduğu hanelerde daha fazla tüketim yapıldığı ortaya çıkmıştır. 2002 yılında hanehalkı reisinin yaşı tüketim harcamaları ile pozitif yönlü bir ilişkiye sahip iken, 2018 yılında bu ilişki tersine dönmüştür. Türkiye ekonomisindeki büyüme trendleri göz önünde bulundurulduğunda bu bulgu yaşam boyu gelir teorisini destekler niteliktedir. Kredi kartı kullanan ve online alışveriş yapan hanelerin bu olanakları kullanmayan hanelere göre daha fazla tüketim harcaması yaptığı sonucuna ulaşılmıştır. Kredi kartları ile e-ticaretin yaygınlaşmasının önemli bir kolaylık sağlaması dolayısıyla bireylerin tüketimini arttırdığı açıktır. Anahtar Kelimeler: Tüketici Ekonomisi: Ampirik Analiz, Kantil Regresyon, Hanehalkı Tüketimi JEL Sınıflandırması: D12, C31 1. Introduction The role of consumption expenditure in economics can be comprehended by its share within Gross Domestic Product (GDP); 55.8 per cent of GDP in Turkey was composed of household consumption expenditures in 2018.1 While GDP provides tracking of the performance of the whole economy, trends in living standards can be better captured through measures of household-level consumption expenditure or income.2 According to the utility theory, a higher level of consumption is preferred by consumers because of the assumption of “more is better”. A person who consumes more is regarded as having a higher level of economic well-being, as long as a commodity has a positive utility. Therefore, consumption is mostly used as a welfare indicator. Although household income is another widely used welfare indicator, many studies prefer the concept of consumption to the concept of income. For example, an analysis conducted by the UK Office for National Statistics found that household consumption expenditure has a stronger relationship with individual well-being (i.e., life satisfaction, the feeling of worthiness, and happiness) than household income.3 Because of the strong connection between consumption expenditures and human well-being, the information on the structure of consumption and how it changes over time will be a major contribution to the understanding of the formation of the standard of living of the society.4 On the other hand, criticism towards excessive consumption or consumerism, also known as minimalism, supports the idea of “less is more” with the suggestion that by owning less, more can be achieved through the non-material aspects of life. According to Veblen’s concept of conspicuous consumption, individuals desire to consume goods and services beyond their needs to gain a higher status in society.5 Veblen had attributed two main characteristics to consumption goods; serviceability 1 2 3 4 5 Turkish Statistical Institute (2020). Annual GDP 2019, Press Bulletin, https://data.tuik.gov.tr/Bulten/Index?p=AnnualGross-Domestic-Product-2019-33671, (Accessed on: 07.06.2021) Stiglitz, J. E., Sen, A., Fitoussi, J. P. (2009). Report by the Commission on the Measurement of Economic Performance and Social Progress (CMEPSP), p. 12-18, https://ec.europa.eu/eurostat/documents/8131721/8131772/Stiglitz-SenFitoussi-Commission-report.pdf, (Accessed on 10.06.2021) Lewis, J. (2014). Income, Expenditure and Personal Wellbeing, 2011/12, UK Office for National Statistics. OECD (2013). OECD Framework for Statistics on the Distribution of Household Income, Consumption and Wealth, OECD Publishing, https://read.oecd-ilibrary.org/economics/framework-for-statistics-on-the-distribution-ofhousehold-income-consumption-and-wealth_978.926.4194830-en#page1, (Accessed on: 15.12.2020) Veblen, T. (1899). The Theory of the Leisure Class, Reprint, Delhi: Aakar Books, 2005, p. 17-26. 180 Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi • Cilt: 43 • Sayı: 1 • Haziran 2021, ISSN: 2587-2672, ss/pp. 179-196 and honorific aspects. People may consume luxury goods and services (e. g. luxury cars, expensive vacations, clothes) as a show-off to others. Scott states that conspicuous consumption has surged in our time, more than any other time in history.6 He links the recent rise in conspicuous consumption with the prevalence of credit cards. He argues that credit cards enable individuals to purchase luxury items. The rising trend of luxury c (...truncated)