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


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.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Avcı, G.M. (2011). The effect of working women on patterns of household expenditures in Turkey. Unpublished master thesis, Zonguldak Karaelmas University, Zonguldak, Turkey.

  • Beyaz, F.B. (2007). Household consumption expenditures and demand estimation in Turkey. Unpublished master thesis, Akdeniz University, Antalya, Turkey.

  • Bierens, H.J. & Pott-Buter, H.A. (1991). Specification of household Engel curves by nonparametric regression. Econometric Reviews. 9(2), 123-184. DOI: 10.1080/07474939008800185.

  • Clark, R.M. (1977). Non-parametric estimation of a smooth regression function. Journal of the Royal Statistical SocietySeries B (methodological). 39(1), 107-113.

  • Cleveland, W.S. (1979). Robust locally weighted regression and smoothing scatterplots. Journal of the American Statistical Association. 74(368), 829-836. DOI: 10.1080/01621459.1979.10481038

  • Cleveland, W.S. & Devlin, S.J. (1988). Locally weighted regression: an approach to regression analysis by local fitting. Journal of the American Statistical Association. 83(403), 596-610. DOI: 10.1080/01621459.1988.10478639.

  • Delgado, M.A. & Miles, D. (1997). Household characteristics and consumption behavior: a nonparametric approach. Empirical Economics. 22(3), 409-429.

  • Emeç, H. (2001). Interregional Consumption Expenditures in Turkey: Tobit Model Approach. Dokuz Eylul University, Faculty of Economics and Administrative Sciences Journal. 16(2), 61-73.

  • Gölveren, E. (2012). Kernel regression which is nonparametric regression model and an application in regard to household expenditure in Turkey. Unpublished master thesis, Ataturk University, Erzurum, Turkey.

  • Hollander, M., Wolfe, D.A. & Chicken, E. (2014). Nonparametric statistical methods (3rd ed.). New York: John Wiley & Sons, Inc.

  • Hardle, W. (1992). Applied nonparametric regression, Cambridge: Cambridge University Press.

  • Hardle, W., Müller, M., Sperlich, S. & Werwatz, A. (2004). Nonparametric and semiparametric models, Berlin: Springer.

  • Hart, J.D. (1997). Nonparametric smoothing and lack-of-fit tests. New York: Springer.

  • Jacoby, W.G. (2000). Loess: a nonparametric, graphical tool for depicting relationships between variables. Electoral Studies. 19(4), 577-613. DOI: 10.1016/S0261-3794(99)00028-1.

  • Keele, L. (2008). Semiparametric regression for the social sciences, UK: John Wiley & Sons Ltd.

  • Sarımeşeli, M. (1999). Household Spending Trends. Gazi University, Faculty of Economics and Administrative Sciences Journal. 1(2), 41-50.

  • Tezcan, N. (2009). Approach to estimation with non-parametric regression method. Unpublished PhD thesis, Istanbul University, Istanbul, Turkey.

  • TUIK, (2014). Household Budget Survey. Ankara: TUIK.

  • Yıldız, M. (2013). Analysis of nonparametric fuzzy regression models. Unpublished PhD thesis, Anadolu University, Eskisehir, Turkey.

  • Zortuk, M. (2009). In the context of gender variable, the relationship between income and the expenditure sub-groups the application on Dumlupinar University Student. Dumlupınar University, Journal of Social Sciences. 23(23), 25-32.


Journal + Issues