HOUSEHOLD EXPENDITURE PATTERNS: EVIDENCE FROM WORKING-COUPLE HOUSEHOLDS IN TURKEY*

Year 2015, Volume: 3 Issue: 2, 85 - 108, 10.01.2016

Fatma Bircan Bodur Gizem Mukiyen Avcı

Abstract

This paper attempts to test the implications of household production model and income pooling hypothesis utilizing data on working-couple households drawn from the 2003 Household Budget Survey compiled by Statistics Institute of Turkey. For this purpose, four distinct household expenditures- Food Away from Home (FAFH), Processed Food, Personal Care and Recreation-and-Culture- are analyzed by employing Tobit model as the estimation method. The results of the study of two-earner households indicate that wage rates of wife and husband have no statistically different effects on the FAFH, processed food and recreation-and-culture expenditures while the wage rates of the spouses have diverging effects on the personal care expenditures, holding a set of demographic variables constant. Therefore, the Turkish data reveals that the unitary household decision making is valid in the case of goods that are likely to be consumed collectively by household members whereas the non-unitary household decision making framework is supported in the case of goods that are likely to be consumed separately by family members. In relation to household production model, our estimation results depict that when hours of work of spouses increase FAFH and Processed Food expenditures increase on average, controlled for a set of demographic variables. However, this increase cannot be solely attributed to the gender roles of spouses but expenditures are likely to increase because both spouses are time constrained.

Keywords

Household expenditures, non-unitary models, bargaining power in marriage, household production model

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