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The distribution of consumption-expenditure budget shares: evidence from Italian households.

Barigozzi, Matteo and Alessi, Lucia and Capasso, Marco and Fagiolo, Giorgio (2009) The distribution of consumption-expenditure budget shares: evidence from Italian households. European Central Bank working paper series, 1061. European Central Bank, Frankfurt, Germany.

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Identification Number: 1061

Abstract

This paper explores the statistical properties of house-hold consumption-expenditure budget share distributions —defined as the share of household total expenditure spent for purchasing a specific category of commodities— for a large sample of Italian households in the period 1989-2004. We find that household budget share distributions are fairly stable over time for each specific category, but profoundly heterogeneous across commodity categories. We then derive a para-metric density that is able to satisfactorily characterize household budget share distributions and: (i) is consistent with the observed statistical properties of the underlying levels of household consumption-expenditure distributions; (ii) can accommodate the observed across-category heterogeneity in household budget share distributions. Finally, we taxonomize commodity categories according to the estimated parameters of the proposed density. We show that the resulting classification is consistent with the traditional economic scheme that labels commodities as necessary, luxury or inferior.

Item Type: Monograph (Working Paper)
Official URL: http://www.ecb.europa.eu
Additional Information: © 2009 European Central Bank
Subjects: H Social Sciences > HA Statistics
H Social Sciences > HB Economic Theory
Sets: Departments > Statistics
Collections > Economists Online
Date Deposited: 07 Jan 2011 09:50
Last Modified: 08 Aug 2014 15:54
URI: http://eprints.lse.ac.uk/id/eprint/31207

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