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Psychology, consumer sentiment and household expenditures: a disaggregated analysis

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  • Marco Malgarini

    ()
    (ISAE - Institute for Studies and Economic Analyses)

  • Patrizia Margani

    ()
    (ISAE - Institute for Studies and Economic Analyses)

Abstract

The aim of the paper is to assess the role of the Italian Consumer Sentiment Index (CSI) as an autonomous driving force of consumption decisions. We test for the presence of “rule of thumb” consumers as originally proposed by Campbell and Mankiw (1991), using sentiment measures distinguished by working condition of the household. Consumption data are disaggregated according to durability. The role of sentiment results to be stronger for service expenditures. Psychological motives of employees are found to have a particularly significant influence on consumption decisions. Moreover, CSI can not be explained by economic fundamentals alone, capturing also the effects of the political cycle and exceptional circumstances.

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Bibliographic Info

Paper provided by ISTAT - Italian National Institute of Statistics - (Rome, ITALY) in its series ISAE Working Papers with number 58.

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Length: 31 pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:isa:wpaper:58

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Related research

Keywords: Consumer sentiment; Permanent Income hypothesis; excess sensitivity; psychological approach; heterogeneity of individuals;

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  28. Solange Leproux & Marco Malgarini, 2006. "Consumer sentiment and householde expenditures in Italy: a disaggregated analysis according to the income of the people interviewed," ISAE Working Papers 65, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
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Citations

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Cited by:
  1. Luciana Crosilla, 2006. "The seasonality of ISAE business and consumer surveys: methodological aspects and empirical evidence," ISAE Working Papers 68, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  2. Flora Fullone & Bianca Maria Martelli, 2008. "Re-thinking the ISAE Consumer Survey Processing Procedure," ISAE Working Papers 92, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  3. Dudek, Sławomir, 2008. "Consumer Survey Data and short-term forecasting of households consumption expenditures in Poland," MPRA Paper 19818, University Library of Munich, Germany.

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