Tufan Ekici

Credit card debt and consumption: evidence from household-level data

This research investigates the relationship between credit card debt and consumption using household level data. This is a departure from the previous studies which have used aggregate measures of consumption and general debt such as the Debt Service Ratio or total revolving credit. We use a detailed monthly survey of credit card use to impute credit card debt to respondents from the Consumer Expenditure Survey sample. In contrast to some earlier studies using aggregate data, we find a negative relationship between debt and consumption growth. Our work shows that a

A Measure of the Shadow Economy in a Small Economy: Evidence from Household‐Level Expenditure Patterns

1000 increase in credit card debt results in a decrease in quarterly consumption growth of almost 2%. Investigations are also made into effects of debt within different age categories and into the impact of expected income growth on the debt–consumption relationship.

Correlates of Generalized Trust among Turkish and Greek Cypriots: Evidence from the European Values Survey Data

In this paper we measure the size of the shadow economy in North Cyprus by using micro-econometric approaches and then calculate its implications on national accounts and fiscal balances. There is a relatively new strand of literature that focuses on comparing income-expenditure patterns of households to calculate the degree of underreporting of income levels by self-employed and privately employed individuals, as compared with public servants. We use the 2008 Household Budget Survey of North Cyprus and analyze the differences in food consumption patterns among three kinds of employees: self-employed, privately employed, and public. We found that self‐employed and privately employed individuals underreport their income levels by 20 percent and 13 percent, respectively, compared with publicly employed individuals. This has important implications for the aggregate economy in North Cyprus, where we estimate that the shadow economy created by underreporting is as much as 8.6 percent of GNP and 11.1 percent of total tax revenue.

Shadow price of working in the shadows: services industry evidence

Using the most recent wave of European Values Survey (EVS) data, this study explores the correlates of generalized trust by comparing Turkish and Greek communities living on the island of Cyprus. The results suggest that, besides confidence in institutions, there are different determinants of trust for each Cypriot community. In comparing Greek and Turkish Cypriots, the results suggest that being married, being older, having an urban residence, being in better health, and participating more in voluntary organizations are correlated with higher levels of generalized trust among Turkish Cypriots, whereas Greek Cypriots who are natives and who have more life satisfaction have higher levels of generalized trust. This study makes a significant contribution by being the first empirical study to test generalized trust among both communities living in the island of Cyprus.

Labor Market Experience in a “Pseudo-Home” Country: Turkish Immigrants in Northern Cyprus

ABSTRACT In this paper, we use an exogenous policy variation in the labour market to determine the wage gap between formally and informally employed workers. For our purposes, ‘informal employment’ describes employees who are not officially registered with any social security scheme. We use self-reported employee registration status to identify such workers, but the choice of working unregistered is not exogenous. Nevertheless, through an amnesty that was extended to only some workers in the labour market, we reduce the endogeneity problem, enabling estimation of the wage gap between these two groups. Our two-stage least square estimates reveal that the hourly wage penalty of working in the shadows is as high as 59%, and the monthly salary penalty is around 66%. Moreover, the wage gap is higher (as high as 70%) for those working in the services sector, as unregistered workers in this sector tend to be low skilled and low educated, and the monitoring of this sector is more difficult. Our analysis contributes to the literature by using an instrumental variable to treat the endogeneity of workers’ registration status. In addition, it shows that people working informally in the services industry receive a higher average wage penalty than other informally employed workers.

Introductory Credit Card Offers and Balance Switching Behavior of Cardholders

Abstract In this study we analyze the labor market experiences of Turkish immigrants in Northern Cyprus. Northern Cyprus presents a unique example for Turkish migrants, as many traditional obstacles (language barrier, cultural and ethnic differences and non-transferability of human capital) for immigrant laborers are not applicable since Turkish immigrants have ethnic and cultural similarities to native citizens and Turkey is considered the “motherland” of Northern Cyprus. Nonetheless, significant differences between Turkish immigrants and natives in regard to the labor market exist in Northern Cyprus. Using data from the period 2004–2011, we find that although occupational attainment of immigrants has improved in favor of high-skilled occupations, the average wage gap has not decreased significantly. The statistical estimations reveal that Turkish immigrants earn, on average, 25 percent less than natives in the private sector. Furthermore, half of this gap cannot be explained by differences in individual characteristics and ethnic discrimination.

What Determines Religious and Racial Prejudice in Europe? The Effects of Religiosity and Trust

American consumers carry over

Income Expectations and Happiness: Evidence from British Panel Data

800 billion in unpaid credit card balances.1 With several thousand banks issuing credit cards today, the effort to lure these cardholders has become increasingly competitive. One of the most common business practices in this industry is the use of the introductory offer with a “teaser” interest rate below the going market rate for a fixed period of time. Frequently the low-rate offers will be connected to a transfer of balances from another account. The phenomenon of introductory rates and balance switching has become very important in this industry, and it has been estimated that around 5 billion direct solicitations go out annually, almost 4 solicitations per month per American household.2 This aggressive marketing behavior by banks is credited with increasing competition in the credit card market and the drop in average interest rates that occurred throughout the 1990s. In principle, a strategic consumer can avoid paying high interest rates by taking advantage of these offers. However, not all consumers revolving on credit cards are taking these introductory offers, and it is important to understand the behavior involved in this decision.