Consumer sentiment and householde expenditures in Italy: a disaggregated analysis according to the income of the people interviewed
AbstractThe aim of the paper is to evaluate the relationship between consumers’ climate and consumption, looking – respectively – at income-based indicators of confidence and at consumption expenditures disaggregated by durability. We find that confidence significantly contributes explaining consumption behaviour, especially when service expenditures are considered in the analysis: we interpret this result as an evidence that services are discretional, not strictly necessary expenditures, that may be influenced by the willingness to buy, as was originally suggested by Katona (1951) with reference to durable goods. Moreover, confidence calculated for the poorest people in the ISAE sample is found to have a particular strong relationship with consumption, confirming the recent Souleles (2004) hypothesis that it is especially the opinion of some group of individuals to influence consumption patterns.
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Bibliographic InfoPaper provided by ISTAT - Italian National Institute of Statistics - (Rome, ITALY) in its series ISAE Working Papers with number 65.
Length: 33 pages
Date of creation: Apr 2006
Date of revision:
trading confidence climate; consumption theory; heterogeneous behaviour;
Find related papers by JEL classification:
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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- Marco Malgarini & Patrizia Margani, 2005.
"Psychology, consumer sentiment and household expenditures: a disaggregated analysis,"
ISAE Working Papers
58, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
- Malgarini, Marco & Margani, Patrizia, 2005. "Psychology, consumer sentiment and household expenditures: a disaggregated analysis," MPRA Paper 42443, University Library of Munich, Germany.
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