About
I’m an assistant professor of economics at Ankara Yıldırım Beyazıt University. I received my PhD from University of California, Santa Barbara.
My research interests are in household finance, macroeconomics, healthcare, and applied microeconometrics.
Curriculum Vitae: CV
Projects
Increasing healthcare costs are a big concern for the wellbeing of liquidity-constrained households. This paper evaluates the effect of binding liquidity constraints on healthcare spending decisions. Further, the paper compares the effect of liquidity constraints on healthcare expenditure with the effect on non-health consumption in particular on food consumption. I extend a standard incomplete markets model with a health capital in the felicity function. Theoretically, I show that households reduce their healthcare expenditure due to the binding liquidity constraints in the current period, whereas expenditure declines in the next period due to the expected binding constraints one period ahead. I use the extended model to test the incidence of binding liquidity constraints with a linearized Euler equation. Empirically, I show that the test of liquidity constraints for healthcare expenditure reveals different implications than a standard test of liquidity constraints for nondurable consumption. In particular, current binding constraints and expected binding constraints lead to the opposite direction of bias when the liquidity constraints are omitted. The resulting overall bias depends on which constraint has a stronger effect. Moreover, the income elasticity of healthcare expenditure varies significantly between asset poor and rich families, more than the elasticity of non-health consumption among wealth quintiles. Altogether, my findings show that the effects of liquidity constraints are heterogeneous across households and across expenditure categories.
Estimating income elasticity of consumption is found to be a challenging task. The causal impact of income changes on expenditure is hard to measure due to endogeneity of the treatment variable income. I use a shift-share instrumental variable design a la Bartik (1991) to mitigate the endogeneity concerns by exploiting variation due to local labor market exposure to aggregate shocks. I estimate the income elasticity of consumption that results from the changes in national employment growth in industries weighted with regional employment share of the industry. I find an average elasticity of total household consumption in the ranges between 0.34 to 0.67 depending on the construction of the instrument. Food consumption elasticity ranges between 0.10 to 0.50 though is not always significantly estimated. Of particular interest for income elasticity estimates is the household out-of-pocket healthcare expenditure which has an elasticity around 1.09 to 2.84. This finding adds to the discussion of health spending being a luxury good with an elasticity above one which is found in aggregate cross-country or time-series estimates. I find elasticities above one using household level micro consumption and regional employment growth data whereas micro studies usually conclude health expenditure elasticities around zero.
This paper seeks to evaluate consumption-based poverty in Türkiye between 2003 and 2022. Using representative household data from the Turkish Statistical Institute’s Household Budget Survey, this study calculates the Foster-Greer-Thorbecke (FGT) poverty indices based on relative poverty thresholds. The results show that poverty rates initially declined rapidly between 2003 and 2008, increased slightly between 2008 and 2012, and then continued to decline between 2012 and 2018. After 2018, poverty rates increased in Türkiye, almost reaching the 2007 level. The analysis also includes the decomposition of poverty changes into growth and redistribution components as well as subgroups. Growth in living standards acted as a poverty-reducing effect and was dominant between 2004-2008 and 2012-2018. The redistribution component was a poverty-increasing factor that was dominant after 2018. These periods coincide with the country’s overall economic performance. In particular, the highest decline in poverty rates occurred during high economic growth between 2003-2008. The surge in inflation post-2019 aligns with the increase in consumption poverty rates in 2022.
Other Research
The accumulator industry exhibits a typical example of a vertical market structure, where waste accumulators are collected, then recycled in order to extract lead, which is subsequently used as the main input in the production of new accumulators. Through a theoretical model the thesis analyzes the welfare implications of the extent of competition in such a market structure. It replicates the well-known result that there is an incentive for firms to vertically integrate; yet also shows that enforcing competition is not welfare-enhancing.