How Urban and Rural Population Growth are Related with Household Consumption?: The Case of Turkey

Abstract

In this study we try to identify the long-run relationship between per capita household consumption growth rate and rural and urban population growth rate in Turkey by means of ARDL estimation method with an annual dataset spanning from 1988 to 2019. Co-integration analysis results show that series of urban population growth rate, rural population growth rate, and per capita household consumption growth are co-integrated and they move together in the long-run in Turkey. Long-run coefficient estimations disclose that rural population growth rate has a statistically significant negative impact on household consumption growth and urban population growth rate has a statistically significant positive impact on household consumption growth rate. According to the long-run coefficient estimations, it can be asserted that a one percent increase in rural population growth rate causes to a drop by 4.006% in household consumption growth rate and that a one percent rise in urban population growth rate leads to an increase by 1.04% in household consumption growth rate in the long-run in Turkey.