<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The relationship between household income and expenditure is important for understanding how the shape of the economic dynamics of the households. In this study, the relationship between household consumption expenditure and household disposable income were analyzed by Locally Weighted Scatterplot Smoothing Regression which is a nonparametric method using R programming. This study aimed to determine relationship between variables directly, unlike making any assumptions are commonly used as in the conventional parametric regression. According to the findings, effect on expenditure with increasing of income and household size together increased rapidly at first, and then speed of increase decreased. This increase can be explained by having greater compulsory consumption expenditure relatively in small households. Besides, expenditure is relatively higher in middle and high income levels according to low income level. However, the change in expenditure is limited in middle and is the most limited in high income levels when household size changes.</p></abstract>

The relationship between household income and expenditure is important for understanding how the shape of the economic dynamics of the households. In this study, the relationship between household consumption expenditure and household disposable income were analyzed by Locally Weighted Scatterplot Smoothing Regression which is a nonparametric method using R programming. This study aimed to determine relationship between variables directly, unlike making any assumptions are commonly used as in the conventional parametric regression. According to the findings, effect on expenditure with increasing of income and household size together increased rapidly at first, and then speed of increase decreased. This increase can be explained by having greater compulsory consumption expenditure relatively in small households. Besides, expenditure is relatively higher in middle and high income levels according to low income level. However, the change in expenditure is limited in middle and is the most limited in high income levels when household size changes.

Forecasting of Households Consumption Expenditure with Nonparametric Regression: The Case of Turkey

Taner Akmercan is a PhD Student. This paper is derived from his PhD thesis under the supervision of first author.

Zagreb International Review of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The relationship between household income and expenditure is important for understanding how the shape of the economic dynamics of the households. In this...

Forecasting of Households Consumption Expenditure with Nonparametric Regression: The Case of Turkey

Published Online: Nov 19, 2016

Page range: 19 - 32

DOI: https://doi.org/10.1515/zireb-2016-0006

Keywords
Household Consumption Expenditure, nonparametric regression, LOESS

© 2016 Noyan Aydin et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Forecasting of Households Consumption Expenditure with Nonparametric Regression: The Case of Turkey

Published Online: Nov 19, 2016

Page range: 19 - 32

DOI: https://doi.org/10.1515/zireb-2016-0006

KeywordsHousehold Consumption Expenditure, nonparametric regression, LOESS

© 2016 Noyan Aydin et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Household Consumption Expenditure, nonparametric regression, LOESS