Do Household Consumption and Saving Preferences Vary Between Birth-Year Cohorts in Turkey?

Evren Ceritoğlu

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: We analyze consumption and saving preferences of birth-year cohorts with respect to age groups and income definitions in Turkey. For this purpose, we develop a pseudo-panel data set based on birth-year cohorts using sixteen consecutive Household Budget Surveys (HBS), which are prepared by the Turkish Statistical Institute (TURKSTAT) from 2003 to 2018. Our empirical analysis reveals that there is a positive and significant relationship between the growth of cohort consumption and the growth of cohort income. Moreover, the direction of this relationship is robust to the definition of income. Our empirical findings suggest that the marginal propensity to consume (MPC) out of current income is slightly higher than the MPC out of permanent income among birth-year cohorts. We find notable fluctuations in the estimated MPC rates only when we classify birth-year cohorts according to age groups. Therefore, we conclude that consumption and saving preferences of birth-year cohorts vary significantly according to age groups.

Keywords: Household consumption and saving preferences; Birth-year cohorts; Pseudo-panel; Marginal propensity to consume (search for similar items in EconPapers)
JEL-codes: C33 D12 D14 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ara
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN ... g+Paperss/2020/20-15 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:2015

Access Statistics for this paper

More papers in Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey Contact information at EDIRC.
Bibliographic data for series maintained by Sermet Pekin () and Ilker Cakar () and ().