HOUSEHOLD CONSUMPTION INEQUALITY FOR URBAN AND RURAL AREAS IN TURKEY: A QUANTILE REGRESSION APPROACH

Abstract

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.