The permanent income hypothesis states a strong relationship between household consumption and lifetime income. Based on this argument, this study, following previous studies in that respect, analyzes the possible impact of expectations in this relationship in case of uncertainty in the model. The empirical analyses for Turkey could not find a statistically significant relationship between household consumption, income and confidence index which is used as a proxy for income expectations. However, besides, expectations on purchasing power and employment opportunities having statistically signifıcant effect on household consumption expenditures, they do decrease the percentage of unexplained variance.
Key words: Consumption, Expectations, Confidence İndex Article Language: EnglishTurkish
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