An analysis of household consumption in turkey using micro data

Consumption is a fundamental component of household welfare and macroeconomic activity, and modern approaches emphasize that households approach these decisions from a life-cycle perspective. In this study, household consumption in Turkey is subjected to a comprehensive econometric analysis using microdata. For this purpose, a repeated cross-sectional dataset comprising 84,164 observations from the Household Budget Survey (HBS) for the years 2011-2018, compiled by the Turkish Statistical Institute (TURKSTAT), was utilized. The empirical model is based on a consumption function defined in logarithmic form and was estimated using the Pooled Ordinary Least Squares (Pooled OLS) method. To explain consumption behavior, the model incorporates socio-demographic variables such as age, age-squared, income, gender of the household head, education level, generational differences, property ownership, and household composition. This study employs a comparative design to reveal behavioral differences across the life cycle, conducting the analysis on three distinct groups: the full sample, households headed by a non-retired individual, and households headed by a retiree. Empirical findings indicate that household consumption behavior in Turkey systematically differs according to income, age, generation, and socio-demographic factors. Income has a strong and positive effect on consumption; however, the magnitude of this effect is more limited among retired households. An examination of the age profile reveals that consumption reaches its peak in middle age and declines in later years; this decline, however, is more gradual during the retirement period. Cohort differences indicate that younger generations exhibit a higher propensity to consume. Education level and homeownership also emerge as significant factors that increase consumption; in particular, owner-occupied households maintain higher consumption levels even during retirement. In conclusion, the findings demonstrate that consumption behavior in Turkey is not only dependent on income level but is shaped by multidimensional factors such as life-cycle stage, generational cohort, education, property ownership, and demographic structure. Keywords: Consumption expenditures, household budget survey, pooled ordinary least squares, socio-demographic factors, retirement