Household Expectations and Household Consumption Expenditures : The Case of Turkey
The empirical analysis confirms that household expectations have a direct role on their consumption and saving behaviour in addition to their indirect influence through the income channel. The econometric results show that there is a positive and statistically significant relationship between the growth of consumption and expected income changes. Therefore, the strict version of the rational expectations permanent income hypothesis (REPIH) is rejected for the Turkish economy. The empirical analysis reveals that the expansion of the real consumer credit volume is more important on the growth of consumption than the real interest rates. Moreover, there is a positive and statistically significant relationship between the Job Opportunities Index from the TURKSTAT-CBRT Consumer Tendency Survey and the growth of consumption. Household expenditures on durable goods are more sensitive to changes in household expectations, the real interest rates and consumer credits than household expenditures on non-durable goods and services. As a result, the econometric results are in favour of the precautionary saving hypothesis.
|Date of creation:||2013|
|Contact details of provider:|| Postal: Head Office, Istiklal Cad. 10 Ulus, 06100 Ankara|
Phone: (90 312) 507 5000
Fax: (90 312) 507 5640
Web page: http://www.tcmb.gov.tr
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:tcb:wpaper:1310. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ozlem Ekmekciler Ramalho Rocha)or (Ilker Cakar)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.