Analysis of household consumption expenditures in Turkey

Consumption expenditures, which are an important component of national income, is known as a factor closely related to the growth performance of the economy. Household consumption expenditures are one of the major prosperity indicators of a country or society. The way in which consumption changes in the face of the changes in the incomes of the households is a matter of interest of firms and public authorities. Consumption expenditures are explained by Engel Curve in the context of income-consumption relations in microeconomics. The engel curve is defined as a curve that shows the relationship between the amount of consumption of a particular good and total income (or disposable income). In this context, income elasticities calculated from the Engel curves are used as an indicator of household spending behavior in general terms. In this study, household income elasticity values of 12 major commadity groups were estimated and commadity groups were evaluated as qualifications using by budget survey data of Turkey Statistical Institute, 2014. In order to find the most suitable functions for the expenditure groups, 117 predictions estimated through 9 functional forms were examined and the most appropriate pattern for each expenditure group was selected. In the expenditure groups considered as food and non-alcoholic beverages, alcoholic beverages, cigarettes and tobacco, clothing and footwear, housing, water, electricity, gas and other fuels, furniture, home appliances and home care services, transportation, catering services and hotels, various goods and services spending are found to be necessity goods. Other expenditures, education services and health spending were found to be luxurious goods.