The distribution of household consumption-expenditure budget shares
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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Erich Battistin & Richard Blundell & Arthur Lewbel, 2009.
"Why Is Consumption More Log Normal than Income? Gibrat's Law Revisited,"
Journal of Political Economy,
University of Chicago Press, vol. 117(6), pages 1140-1154, December.
- Erich Battistin & Richard Blundell & Arthur Lewbel, 2007. "Why is Consumption More Log Normal Than Income? Gibrat's Law Revisited," Boston College Working Papers in Economics 671, Boston College Department of Economics.
- Erich Battistin & Richard Blundell & Arthur Lewbel, 2007. "Why is consumption more log normal than income? Gibrat's law revisited," IFS Working Papers W07/08, Institute for Fiscal Studies.
- Blundell, Richard, 1988. "Consumer Behaviour: Theory and Empirical Evidence--a Survey," Economic Journal, Royal Economic Society, vol. 98(389), pages 16-65, March.
- Giulio Bottazzi & Angelo Secchi, 2006.
"Explaining the distribution of firm growth rates,"
RAND Journal of Economics,
RAND Corporation, vol. 37(2), pages 235-256, 06.
- Richard Blundell & Xiaohong Chen & Dennis Kristensen, 2003. "Nonparametric IV estimation of shape-invariant Engel curves," CeMMAP working papers CWP15/03, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Caselli, F. & Ventura, J., 1996.
"A Representative Consumer Theory of Distribution,"
96-11, Massachusetts Institute of Technology (MIT), Department of Economics.
- Brandolini, A., 1999.
"The Distribution of Personal Income in Post-War Italy: Source Description, Date Quality, and the Time Pattern of Income Inequality,"
350, Banca Italia - Servizio di Studi.
- Andrea Brandolini, 1999. "The Distribution of Personal Income in Post-War Italy: Source Description, Data Quality, and the Time Pattern of Income Inequality," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 58(2), pages 183-239, September.
- Andrea Brandolini, 1999. "The Distribution of Personal Income in Post-War Italy: Source Description, Data Quality, and the Time Pattern of Income Inequality," Temi di discussione (Economic working papers) 350, Bank of Italy, Economic Research and International Relations Area.
- Milevsky, Moshe Arye & Posner, Steven E., 1998. "Asian Options, the Sum of Lognormals, and the Reciprocal Gamma Distribution," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 33(03), pages 409-422, September.
- Mizuno, Takayuki & Toriyama, Masahiro & Terano, Takao & Takayasu, Misako, 2008. "Pareto law of the expenditure of a person in convenience stores," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(15), pages 3931-3935.
- Jarque, Carlos M. & Bera, Anil K., 1980. "Efficient tests for normality, homoscedasticity and serial independence of regression residuals," Economics Letters, Elsevier, vol. 6(3), pages 255-259.
- Giorgio Fagiolo & Lucia Alessi & Matteo Barigozzi & Marco Capasso, 2007.
"On the distributional properties of household consumption expenditures. The case of Italy,"
LEM Papers Series
2007/24, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Giorgio Fagiolo & Lucia Alessi & Matteo Barigozzi & Marco Capasso, 2010. "On the distributional properties of household consumption expenditures: the case of Italy," Empirical Economics, Springer, vol. 38(3), pages 717-741, June.
- Attanasio, Orazio P., 1999. "Consumption," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 11, pages 741-812 Elsevier.
- Forni, Mario & Lippi, Marco, 1997. "Aggregation and the Microfoundations of Dynamic Macroeconomics," OUP Catalogue, Oxford University Press, number 9780198288008, March.
- Erich Battistin & Raffale Miniaci & Guglielmo Weber, 2000.
"What do we learn from recall consumption data?,"
IFS Working Papers
W00/10, Institute for Fiscal Studies.
- repec:ver:wpaper:36 is not listed on IDEAS
- A. Chai & A. Moneta, 2008. "At the Origins of Engel Curves Estimation," Papers on Economics and Evolution 2008-02, Philipps University Marburg, Department of Geography.
- Giulio Bottazzi & Giovanni Dosi & Giorgio Fagiolo & Angelo Secchi, 2004.
"Sectoral and Geographical Specificities in the Spatial Structure of Economic Activities,"
LEM Papers Series
2004/21, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Bottazzi, Giulio & Dosi, Giovanni & Fagiolo, Giorgio & Secchi, Angelo, 2008. "Sectoral and geographical specificities in the spatial structure of economic activities," Structural Change and Economic Dynamics, Elsevier, vol. 19(3), pages 189-202, September.
- Martin Hohnisch & Sabine Pittnauer & Manisha Chakrabarty, 2002. "Empirical Regularities in Distributions of Individual Consumption Expenditure," Papers cond-mat/0201195, arXiv.org.
- McLaren, Keith R & Fry, Jane M & Fry, Tim R L, 1995. "A Simple Nested Test of the Almost Ideal Demand System," Empirical Economics, Springer, vol. 20(1), pages 149-61.
- Giorgio Fagiolo & Mauro Napoletano & Andrea Roventini, 2006.
"Are Output Growth-Rate Distributions Fat-Tailed? Some Evidence from OECD Countries,"
LEM Papers Series
2006/23, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Giorgio Fagiolo & Mauro Napoletano & Andrea Roventini, 2008. "Are output growth-rate distributions fat-tailed? some evidence from OECD countries," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(5), pages 639-669.
- Giorgio Fagiolo & Mauro Napoletano & Andrea Roventini, 2006. "Are output growth-rate distributions fat-tailed? Some evidence from OECD countries," Sciences Po publications 36, Sciences Po.
- F. Clementi & M. Gallegati, 2005.
"Pareto's Law of Income Distribution: Evidence for Germany, the United Kingdom, and the United States,"
physics/0504217, arXiv.org, revised Mar 2006.
- Fabio Clementi & Mauro Gallegati, 2005. "Pareto's Law of Income Distribution: Evidence for Grermany, the United Kingdom, and the United States," Microeconomics 0505006, EconWPA.
- Alan P. Kirman, 1992. "Whom or What Does the Representative Individual Represent?," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-136, Spring.
- Bera, Anil K. & Jarque, Carlos M., 1981. "Efficient tests for normality, homoscedasticity and serial independence of regression residuals : Monte Carlo Evidence," Economics Letters, Elsevier, vol. 7(4), pages 313-318.
- Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, number 9780198288244, March.
- Andreas Chai & Alessio Moneta, 2010. "Retrospectives: Engel Curves," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 225-40, Winter.
- Hendry, David F., 2000. "Econometrics: Alchemy or Science?: Essays in Econometric Methodology," OUP Catalogue, Oxford University Press, number 9780198293545, March.
- Richard Blundell & Xiaohong Chen & Dennis Kristensen, 2007. "Semi-Nonparametric IV Estimation of Shape-Invariant Engel Curves," Econometrica, Econometric Society, vol. 75(6), pages 1613-1669, November.
- Szekely, Gábor J. & Rizzo, Maria L., 2005. "A new test for multivariate normality," Journal of Multivariate Analysis, Elsevier, vol. 93(1), pages 58-80, March.
- Fry, Jane M. & Fry, Tim R. L. & McLaren, Keith R., 1996. "The stochastic specification of demand share equations: Restricting budget shares to the unit simplex," Journal of Econometrics, Elsevier, vol. 73(2), pages 377-385, August.
- A. Azzalini & A. Capitanio, 1999. "Statistical applications of the multivariate skew normal distribution," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 61(3), pages 579-602.
- James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
- Joachim Engel & Alois Kneip, 1996. "Recent approaches to estimating Engel curves," Journal of Economics, Springer, vol. 63(2), pages 187-212, June.
- Andreas Chai & Alessio Moneta, 2009. "Satiation, Escaping Satiation, and Structural Change: Some Evidence from the Evolution of Engel Curves," Papers on Economics and Evolution 2008-18, Philipps University Marburg, Department of Geography.
When requesting a correction, please mention this item's handle: RePEc:eee:streco:v:23:y:2012:i:1:p:69-91. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.