A note on welfare and the economic shocks
AbstractThe behaviour of the permanent and transitory economic shocks for different levels of household's welfare is studied using both consumption and income measures. After testing for heteroskedasticity of the economic shocks, we use local polynomial regression models to estimate the variance of the shocks conditional on welfare level. Italian data covering the period 1980-2004 show evidence of heteroskedasticity of both the transitory and the permanent economic shocks, with the poor experiencing higher variances. The permanent shocks seem to have a more uniform effect at all welfare levels.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 29 (2009)
Issue (Month): 3 ()
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Find related papers by JEL classification:
- I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
- D1 - Microeconomics - - Household Behavior
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- Andrea Brandolini & Piero Cipollone & Paolo Sestito, 2001. "Earnings Dispersion, Low Pay and Household Poverty in Italy, 1977-1998," Temi di discussione (Economic working papers) 427, Bank of Italy, Economic Research and International Relations Area.
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- Richard Blundell & Ian Preston, 1998.
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The Quarterly Journal of Economics,
MIT Press, vol. 113(2), pages 603-640, May.
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