IDEAS home Printed from https://ideas.repec.org/a/spr/qualqt/v51y2017i4d10.1007_s11135-016-0364-8.html
   My bibliography  Save this article

The effects of various motives to save money on the propensity of Italian households to allocate an unexpected inheritance towards consumption

Author

Listed:
  • Luca Zanin

    (Prometeia)

Abstract

We examine the effects of various motives to save money on the propensity of Italian households to allocate an unexpected inheritance towards consumption. To achieve this objective, we use microdata collected by the Bank of Italy in a structured questionnaire as part of the Italian Survey of Household Income and Wealth for 2012, which consists of a sample of 8151 Italian households. Among our results of interest, we found that families who are motivated to save money because they are planning to set up a new business, to invest in an existing business, to travel on holiday, or to make large purchases (such as automobiles, furniture, and so forth) are more likely to allocate an income shock towards consumption than families who are motivated by the need to save money to protect themselves (such as by providing for unexpected cash needs and/or retirement). We also found that such motivations have a non-linear (increasing/decreasing) effect on response behaviours to income shocks.

Suggested Citation

  • Luca Zanin, 2017. "The effects of various motives to save money on the propensity of Italian households to allocate an unexpected inheritance towards consumption," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(4), pages 1755-1775, July.
    • Handle: RePEc:spr:qualqt:v:51:y:2017:i:4:d:10.1007_s11135-016-0364-8
    DOI: 10.1007/s11135-016-0364-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11135-016-0364-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11135-016-0364-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tullio Jappelli & Luigi Pistaferri, 2010. "The Consumption Response to Income Changes," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 479-506, September.
    2. repec:bla:econom:v:68:y:2001:i:270:p:221-41 is not listed on IDEAS
    3. Garz, Marcel, 2014. "Consumption, labor income uncertainty, and economic news coverage," MPRA Paper 56076, University Library of Munich, Germany.
    4. repec:bla:revinw:v:43:y:1997:i:3:p:319-33 is not listed on IDEAS
    5. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6, National Bureau of Economic Research, Inc.
    6. Silvia Ferrari & Francisco Cribari-Neto, 2004. "Beta Regression for Modelling Rates and Proportions," Journal of Applied Statistics, Taylor & Francis Journals, vol. 31(7), pages 799-815.
    7. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1992. "Earnings uncertainty and precautionary saving," Journal of Monetary Economics, Elsevier, vol. 30(2), pages 307-337, November.
    8. Padula, Mario, 2004. "Consumer durables and the marginal propensity to consume out of permanent income shocks," Research in Economics, Elsevier, vol. 58(4), pages 319-341, December.
    9. Baiardi, Donatella & Manera, Matteo & Menegatti, Mario, 2013. "Consumption and precautionary saving: An empirical analysis under both financial and environmental risks," Economic Modelling, Elsevier, vol. 30(C), pages 157-166.
    10. Friederike Mengel & Elias Tsakas & Alexander Vostroknutov, 2016. "Past experience of uncertainty affects risk aversion," Experimental Economics, Springer;Economic Science Association, vol. 19(1), pages 151-176, March.
    11. Fausta Ongaro & Stefano Mazzuco & Silvia Meggiolaro, 2009. "Economic Consequences of Union Dissolution in Italy: Findings from the European Community Household Panel," European Journal of Population, Springer;European Association for Population Studies, vol. 25(1), pages 45-65, February.
    12. Garz, Marcel, 2013. "Unemployment expectations, excessive pessimism, and news coverage," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 156-168.
    13. Trostel, Philip A & Taylor, Grant A, 2001. "A Theory of Time Preference," Economic Inquiry, Western Economic Association International, vol. 39(3), pages 379-395, July.
    14. Andrew Clark & Yannis Georgellis & Peter Sanfey, 2001. "Scarring: The Psychological Impact of Past Unemployment," Economica, London School of Economics and Political Science, vol. 68(270), pages 221-241, May.
    15. Tullio Jappelli & Luigi Pistaferri, 2006. "Intertemporal Choice and Consumption Mobility," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 75-115, March.
    16. Bryant,W. Keith & Zick,Cathleen D., 2006. "The Economic Organization of the Household," Cambridge Books, Cambridge University Press, number 9780521805278, October.
    17. Ulrike Malmendier & Stefan Nagel, 2011. "Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 373-416.
    18. Andreas Knabe & Steffen Rätzel, 2011. "Scarring or Scaring? The Psychological Impact of Past Unemployment and Future Unemployment Risk," Economica, London School of Economics and Political Science, vol. 78(310), pages 283-293, April.
    19. Karlsson, Niklas & Dellgran, Peter & Klingander, Birgitta & Garling, Tommy, 2004. "Household consumption: Influences of aspiration level, social comparison, and money management," Journal of Economic Psychology, Elsevier, vol. 25(6), pages 753-769, December.
    20. Zanin, Luca, 2015. "Determinants of risk attitudes using sample surveys: The implications of a high rate of nonresponse," Journal of Behavioral and Experimental Finance, Elsevier, vol. 8(C), pages 44-53.
    21. Holden, Stein T. & Shiferaw, Bekele & Wik, Mette, 1998. "Poverty, market imperfections and time preferences: of relevance for environmental policy?," Environment and Development Economics, Cambridge University Press, vol. 3(1), pages 105-130, February.
    22. Luigi Pistaferri, 2001. "Superior Information, Income Shocks, And The Permanent Income Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 465-476, August.
    23. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
    24. Fernández-Villaverde, Jesús & Krueger, Dirk, 2011. "Consumption And Saving Over The Life Cycle: How Important Are Consumer Durables?," Macroeconomic Dynamics, Cambridge University Press, vol. 15(5), pages 725-770, November.
    25. Papke, Leslie E & Wooldridge, Jeffrey M, 1996. "Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 619-632, Nov.-Dec..
    26. Klaas de Vos & M. Asghar Zaidi, 1997. "Equivalence Scale Sensitivity Of Poverty Statistics For The Member States Of The European Community," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 43(3), pages 319-333, September.
    27. Bryant,W. Keith & Zick,Cathleen D., 2006. "The Economic Organization of the Household," Cambridge Books, Cambridge University Press, number 9780521801416, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jyotir Moy Chatterjee & Le Hoang Son & Srijani Ghatak & Raghvendra Kumar & Manju Khari, 2018. "BitCoin exclusively informational money: a valuable review from 2010 to 2017," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(5), pages 2037-2054, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dirk Krueger & Egor Malkov & Fabrizio Perri, 2024. "How Do Households Respond to Income Shocks?," PIER Working Paper Archive 24-022, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    2. Meghir, Costas & Pistaferri, Luigi, 2011. "Earnings, Consumption and Life Cycle Choices," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 9, pages 773-854, Elsevier.
    3. Luca Zanin, 2016. "On Italian Households’ Economic Inadequacy Using Quali-Quantitative Measures," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 59-88, August.
    4. Jappelli, Tullio & Pistaferri, Luigi, 2020. "Permanent Income Shocks, Target Wealth, and the Wealth Gap," CEPR Discussion Papers 15145, C.E.P.R. Discussion Papers.
    5. Dirk Krueger & Egor Malkov & Fabrizio Perri, 2023. "How Do Households Respond to Income Shocks?," NBER Working Papers 31894, National Bureau of Economic Research, Inc.
    6. Michael Walden, 2012. "Will Households Change Their Saving Behaviour After the “Great Recession”? The Role of Human Capital," Journal of Consumer Policy, Springer, vol. 35(2), pages 237-254, June.
    7. Rossi, Mariacristina, 2005. "Households’ Consumption under the Habit Formation Hypothesis. Evidence from Italian Households using the Survey of Household Income and Wealth (SHIW)," Economics Discussion Papers 8886, University of Essex, Department of Economics.
    8. Elisabeth Beckmann & Mariya Hake & Jarmila Urvová, 2013. "Determinants of Households’ Savings in Central, Eastern and Southeastern Europe," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 8-29.
    9. Nakajima, Jouchi, 2020. "The role of household debt heterogeneity on consumption: Evidence from Japanese household data," Economic Analysis and Policy, Elsevier, vol. 65(C), pages 186-197.
    10. Cai, Shu & Park, Albert, 2016. "Permanent income and subjective well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 298-319.
    11. Lugilde, Alba & Bande, Roberto & Riveiro, Dolores, 2017. "Precautionary Saving: a review of the theory and the evidence," MPRA Paper 77511, University Library of Munich, Germany.
    12. Christos A. Makridis & Michael Ohlrogge, 2022. "Foreclosure spillovers and individual well‐being: Evidence from the Great Recession," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(1), pages 122-146, March.
    13. Daria Pignalosa, 2021. "The Euler Equation Approach: Critical Implications of Recent Developments in the Theory of Intertemporal Choice," Bulletin of Political Economy, Bulletin of Political Economy, vol. 15(1), pages 1-43, June.
    14. Hryshko, Dmytro, 2014. "Correlated income shocks and excess smoothness of consumption," Journal of Economic Dynamics and Control, Elsevier, vol. 48(C), pages 41-62.
    15. Jonathan Gruber & Aaron Yelowitz, 1999. "Public Health Insurance and Private Savings," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1249-1274, December.
    16. Klos, Alexander & Rottke, Simon, 2013. "Saving and Consumption When Children Move Out," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79786, Verein für Socialpolitik / German Economic Association.
    17. Alessandro Federici & Pierluigi Montalbano, 2012. "Macroeconomic volatility, consumption behaviour and welfare: A cross-country analysis," Working Paper Series 3612, Department of Economics, University of Sussex Business School.
    18. Hubbard, R. Glenn & Skinner, Jonathan & Zeldes, Stephen P., 1994. "The importance of precautionary motives in explaining individual and aggregate saving," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 59-125, June.
    19. Yunus Aksoy & Henrique S. Basso & Carolyn St Aubyn, 2019. "Time Variation in Lifecycle Consumption and Income," BCAM Working Papers 1904, Birkbeck Centre for Applied Macroeconomics.
    20. Luc Arrondel & Hector Calvo Pardo, 2008. "Les Français sont-ils prudents ? Patrimoine et risque sur les revenus des ménages," Working Papers halshs-00585994, HAL.

    More about this item

    Keywords

    Consumption; Income shock; Italian survey of household income and wealth; Beta regression model; Fractional probit model; Ordered logit model;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:qualqt:v:51:y:2017:i:4:d:10.1007_s11135-016-0364-8. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.