Household Consumption Inequality for Urban and Rural Areas in Turkey: A Quantile Regression Approach

Household Consumption Inequality for Urban and Rural Areas in Turkey: A Quantile Regression Approach

In this paper we examine the rural-urban consumption disparity in Turkey by using data from Household Consumption Expenditures surveys, conducted by Turkish Statistical Institute from the year 2010 to 2015. The econometric method of the study is the quantile regression method. Primary findings from quantile regression techniques suggest that the urban-rural consumption disparity is on rise in every quantile in Turkey, and the larger consumption discrepancies are associated with lower quantiles. The effect of income in urban area for all of quantiles have a higher magnitude than rural area, indicating expenditure on total consumption tend to be is more sensitive to changes in income in urban areas than in rural areas. The results also indicate that increasing the educational level of rural household head is helpful in reducing urban-rural consumption disparity. Household size and household expenditure have an inverted U-shape relationship implying that households’ expenditure increases in household size at a decreasing rate both in rural and urban areas.

___

  • Agyire-Tettey, F., Ackah, C. G., & Asuman, D. (2018). An unconditional quantile regression based decomposition of spatial welfare inequalities in Ghana. The Journal of Development Studies, 54(3), 537-556.
  • Başlevent, C., & Dayıoğlu Tayfur, M. (2005). A household level examination of regional income disparity in Turkey.
  • Bassett, G. W., & Chen, H. L. (2002). Portfolio style: Return-based attribution using quantile regression. In Economic applications of quantile regression (pp. 293-305). Physica, Heidelberg.
  • Bui, T. P., & Imai, K. S. (2019). Determinants of rural-urban inequality in Vietnam: Detailed decomposition analyses based on unconditional quantile regressions. The journal of development studies, 55(12), 2610-2625.
  • Chamarbagwala, R. (2010). Economic liberalization and urban–rural inequality in India: a quantile regression analysis. Empirical Economics, 39(2), 371-394.
  • Çağlayan, E., & Astar, M. (2012). A microeconometric analysis of household consumption expenditure determinants for both rural and urban areas in Turkey.
  • Cutler, D. M., Katz, L. F., Card, D., & Hall, R. E. (1991). Macroeconomic performance and the disadvantaged. Brookings papers on economic activity, 1991(2), 1-74.
  • Cutler, D. M., & Katz, L. F. (1992). Rising Inequality? Changes in the Distribution of Income and Consumption in the 1980s.
  • Duman, A. (2010). Female education inequality in Turkey: factors affecting girls' schooling decisions. International Journal of Education Economics and Development, 1(3), 243-258.
  • Duygan, B., & Güner, N. (2006). Income and Consumption Inequality in Turkey: What role does education play?. In The Turkish Economy (pp. 77-105). Routledge.
  • Eksi, O., & Kırdarb, M. G. (2015). Emek gelirlerinin ve eşitsizliğinin Türkiye için bir analizi: 2002-2011 (No. 2015/2). Discussion Paper.
  • Filiztekin, A. (2015). Income inequality trends in Turkey. Iktisat Isletme ve Finans, 30(350), 63-92.
  • Filiztekin, A. (2020). Income inequality in Turkey: 2003–2015. In Turkey’s political economy in the 21st century (pp. 63-84). Palgrave Macmillan, Cham.
  • Karaoglan, D., & Tansel, A. (2017). Determinants of obesity in Turkey: a quantile regression analysis from a developing country. Available at SSRN 2900125.
  • Koenker, R., & Bassett Jr, G. (1978). Regression quantiles. Econometrica: journal of the Econometric Society, 33-50.
  • Koenker, R., & Hallock, K. F. (2001). Quantile regression. Journal of economic perspectives, 15(4), 143-156.
  • Huang, W. H. (2015). The determinants of household electricity consumption in Taiwan: Evidence from quantile regression. Energy, 87, 120-133.
  • Huang, Q., Zhang, H., Chen, J., & He, M. J. J. B. B. (2017). Quantile regression models and their applications: A review. Journal of Biometrics & Biostatistics, 8(3), 1-6.
  • Johnson, D. S., & Shipp, S. (1999). Inequality and the business cycle: a consumption viewpoint. Empirical Economics, 24(1), 173-180.
  • Nguyen, B. T., Albrecht, J. W., Vroman, S. B., & Westbrook, M. D. (2007). A quantile regression decomposition of urban–rural inequality in Vietnam. Journal of Development Economics, 83(2), 466-490.
  • Qu, Z. F., & Zhao, Z. (2008). Urban-rural consumption inequality in China from 1988 to 2002: Evidence from quantile regression decomposition.
  • Slesnick, D. T. (1993). Gaining ground: poverty in the postwar United States. Journal of political Economy, 101(1), 1-38.
  • Tamkoç, M. N., & Torul, O. (2020). Cross-sectional facts for macroeconomists: wage, income and consumption inequality in turkey. The Journal of Economic Inequality, 18(2), 239-259.
  • Tekgüç, H. (2018). Declining poverty and inequality in turkey: the effect of social assistance and home ownership. South European Society and Politics, 23(4), 547-570.
  • Torul, O., & Öztunalı, O. (2018). On income and wealth inequality in Turkey. Central Bank Review, 18(3), 95-106.
  • TurkStat, Household Budget Survey Micro dataset. 2010, 2011, 2012, 2013, 2014, 2015.
  • http://www.tuik.gov.tr/PreTablo.do?alt_id=1012: access:10.07.2019.
  • http://www.tuik.gov.tr/MicroVeri/GYKA_2014/turkce/downloads/tablo1.xlsx. access:10.07.2019
  • Valenzuela, C., Valencia, A., White, S., Jordan, J. A., Cano, S., Keating, J., ... & Potter, L. B. (2014). An analysis of monthly household energy consumption among single-family residences in Texas, 2010. Energy Policy, 69, 263-272.