Climate change and regional income inequality nexus: Evidence from Türkiye

Tayyar, Ahmet Emrah and Biçen, Ömer Faruk (2025) Climate change and regional income inequality nexus: Evidence from Türkiye. ACTA OECONOMICA, 75 (3). pp. 454-484. ISSN 0001-6373

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Abstract

This study's primary goal is to investigate how climate change affects Türkiye's overall and regional income distribution. The study used the average temperature and precipitation levels as independent factors and the P80/P20 criterion for the 2014–2022 period as the dependent variable. To estimate models examining the relationships between variables within sub-sample groups, the system generally employs the generalized method of moments (GMM) estimator. The findings of the analysis show that i) An increase in the average precipitation level has a linear impact on income inequality in the models that include all 26 regions. Nevertheless, this effect is not very strong. ii) An increase in average temperature affects income inequality nonlinearly. The non-linear relationship was found to be in the shape of an inverted U. iii) The findings for all 26 regions were similar in the areas with higher average temperatures. iv) The impact of average temperature increases on income inequality is linear in low-income and agriculturally dominated regions. The income inequality rises by roughly 0.2470–0.2706 units in these locations for every 1 °C increase in the average temperature. v) Although higher average precipitation levels have a linear impact on income inequality in low-income and agriculturally dominated regions, this effect is minimal.

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