Examination of Consumption Expenditure Distribution among NUTS-2 Regions in 2007-2018 with GINI Coefficient

Latif Öztürk,Nimet Varlık

doi:10.5195/emaj.2021.223

Abstract

In this study, the distribution of 12 main expenditure categories included in the consumer price index (CPI) among NUTS-2 (Nomenclature of Territorial Units for Statistics-2) regions is examined. The study covers the years 2007-2018. In the study, interregional consumption expenditure rates are identified with the Gini coefficient, which is a measure of inequality and the obtained consumption expenditure rates through the years are interpreted. The coefficients calculated for each expenditure category are important in terms of revealing the course of consumption behavior of households in Turkey over the years and reflecting the best and worst distribution at the NUTS-2 level. Findings regarding the expenditure categories show that the consumption behavior in Turkey in the relevant period is far from equal at the regional level. According to the findings, the expenditure category with the highest inequality at the NUTS-2 level is the food and non-alcoholic beverages category with an average Gini coefficient of 0.3031. The expenditure category with the highest equal distribution, on the other hand, is the education category with a Gini coefficient of 0.2307 according to the findings.

Highlights

Economic policies aim to increase the welfare level of all individuals and social groups in an economy
The data used to measure the inequality of distribution of expenditure rates based on population are: i) Consumption expenditure rates based on NUTS-2 for 12 consumption expenditure categories from TURKSTAT for the period 2003-2018, "Distribution of expenditure categories based on Nomenclature of Territorial Units for Statistics-2"3, ii) Population data obtained from the population statistics from ADNKS (Address Based Population Registration) system of TURKSTAT.4
The ratio of the 12 main expenditure categories under the consumer price index (CPI) to the total consumption expenditures was identified with the Gini coefficient among the regions at the NUTS-2 level

Summary

Introduction

Economic policies aim to increase the welfare level of all individuals and social groups in an economy. These findings have been incorporated into economic theory as the Engel curve or the Engel's law Consumer spending from their budget for various expenditure categories varies in different income levels. Many studies in economics literature examine the consumption expenditures of consumers, that is, the shares they allocate for different expenditure categories from their budgets. Giles and Hampton (1985) examined the expenditures of households in seven different expenditure categories in New Zealand and found that their expenditure elasticity was quite low The authors compared their findings with the results they obtained from their studies for Australia, England, and the United States of America. Yılmaz's (2014) study reveals the effect of inequality in income distribution on the distribution of consumption expenditures For this purpose, Lorenz curves were created for total income and 13 expenditure categories from TURKSTAT 2008 household consumption expenditure data, and Gini coefficients for these Lorenz curves were calculated.

Data and Methodology

Analysis and Findings

Conclusion