An econometric analysis of Engel’s curve: Household food and clothing consumption in Turkey

Abstract

This paper estimates models of Engel curves for two household commodities, namely food and clothing in Turkey using LAD, M and LTS regressions beside OLS. Obtain results indicate that income elasticities of both food and clothing expenditures are smaller than one, in other words both food expenditure and clothing expenditure are compulsory ex-penditures. In the light of the obtained information, it can be said that tax applications on compulsory expenditures that mean vital needs shall be in a way that will impact the low in-come groups less.