Urbanization linked to household spending
Comparing Number of people living in urban and rural areas, per unit of GDP with Households and NPISHs Final consumption expenditure (constant LCU), per unit of GDP across 172 countries, 2011–2025.
- Rank correlation
- +0.62
- Holding size constant
- +0.48
- Countries compared
- 172
- Period
- 2011–2025
What might link these
The correlation might be driven by the fact that urban areas tend to have higher average incomes and consumption patterns, which could influence household expenditure. A careful reader should be cautious about the potential impact of education levels, which could be a confounder. The relationship could be due to various underlying factors.
Why this is not proof of anything
This is a correlation across countries, not an experiment. It cannot show that either indicator causes the other, and both may simply follow a third thing. This correlation could mislead because it does not account for other factors that might influence both urbanization and household spending, such as government policies or cultural differences.
The second figure above repeats the measurement with national population and income held constant. It is the more conservative number: a relationship that largely disappears there was mostly telling you that larger, richer countries have more of most things.
How this was measured
Both indicators were ranked across every country reporting each, and the two rankings compared — ranks rather than raw values, because a handful of very large countries can otherwise manufacture a relationship on their own. The calculation is arithmetic over figures already published on this site; the commentary above is drafted from the two indicator names and the resulting coefficients.