Consumption dynamics from the framework of consumption theories: an empirical analysis in G7 countries

İnce K., ECEVİT E.

Quality and Quantity, 2025 (Scopus) identifier

  • Yayın Türü: Makale / Tam Makale
  • Basım Tarihi: 2025
  • Doi Numarası: 10.1007/s11135-025-02340-2
  • Dergi Adı: Quality and Quantity
  • Derginin Tarandığı İndeksler: Scopus, International Bibliography of Social Sciences, ABI/INFORM, Index Islamicus, Political Science Complete, Psycinfo, Social services abstracts, Sociological abstracts, Worldwide Political Science Abstracts
  • Anahtar Kelimeler: Driscoll kraay, G7 countries, MMQR, Permanent income hypothesis, Relative income hypothesis
  • Erciyes Üniversitesi Adresli: Evet

Özet

One of the largest components of a country’s gross domestic product (GDP) is consumption behavior has been an area of ​​significant study for hundreds of years. A lot of theories put forward in the economic literature to determine the factors affecting consumption behavior. However, the number of studies conducted in the last few decades on whether individuals’ consumption behavior can be explained by consumption theories in the macroeconomic literature is limited. The main objective of this study is to determine which consumption theory(s) can explain today’s consumption behavior. In light of this objective, the Method of Moments Quantile Regression (MMQR) and Driscoll Kraay (DK) methods were used to analyze how the consumption behavior of G7 (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) countries is shaped in the short and long term. The analysis results show that the permanent income theory is more successful in explaining the consumption behavior of low-income groups, while the relative income theory is more successful in explaining the consumption behavior of high-income groups. The findings indicate that consumption behaviors in both low-income and high-income groups differ according to the extent to which individuals’ basic needs can be met by their income.