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The distribution of household consumption-expenditure budget shares

Barigozzi, Matteo, Alessi, Lucia, Capasso, Marco and Fagiolo, Giorgio (2012) The distribution of household consumption-expenditure budget shares. Structural Change and Economic Dynamics, 23 (1). pp. 69-91. ISSN 0954-349X

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Abstract

This paper explores the statistical properties of household 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 parametric density that is able to satisfactorily characterize (from a univariate perspective) 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: Article
Official URL: http://www.journals.elsevier.com/structural-change...
Additional Information: © 2011 Elsevier
Library of Congress subject classification: H Social Sciences > HA Statistics
H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods: General > C12 - Hypothesis Testing
D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
D - Microeconomics > D3 - Distribution
Sets: Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 08 Dec 2011 16:11
URL: http://eprints.lse.ac.uk/40058/

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