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Consumption during the Great Recession in Italy

Author

Listed:
  • Martina Celidoni

    (Institute for Fiscal Studies)

  • Michele De Nadai

    (Institute for Fiscal Studies)

  • Guglielmo Weber

    (Institute for Fiscal Studies and University of Padua)

Abstract

We use Italian micro data to investigate how consumers reacted to the Great Recession. In particular, we study the age profiles of non-durable consumption, durable purchases and wealth over the 2008-2012 period for different year-of-birth cohorts, and how they departed from the way they would have been had consumer behavior been the same as it was over the 1995-2006 period. We find that consumption dropped most for younger households - only part of these drops can be explained by the increase in unemployment. We also investigate whether the crisis had an impact on the way consumers allocate their spending among broad consumption bundles. We find that the budget elasticity of the demand for food changed during the recession period, particularly among the young.

Suggested Citation

  • Martina Celidoni & Michele De Nadai & Guglielmo Weber, 2016. "Consumption during the Great Recession in Italy," IFS Working Papers W16/10, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:16/10
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    File URL: http://www.ifs.org.uk/uploads/publications/wps/WP201610.pdf
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    Cited by:

    1. Renata Bottazzi & Serena Trucchi & Matthew Wakefield, 2020. "Consumption Responses to a Large Shock to Financial Wealth: Evidence from Italy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(2), pages 762-789, April.
    2. Victoria Kudaisi, Bosede & Akanni Olomola, Philip, 2021. "Effects Of Income Shock On Consumption Among Public Workers In Southwest Nigeria: Evidence From The 2016-2018 Economic Crisis," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 8(2), pages 65-88, June.

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    Keywords

    Great Recession; consumption;

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