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Consumer sentiment and householde expenditures in Italy: a disaggregated analysis according to the income of the people interviewed

Author

Listed:
  • Solange Leproux

    (ISAE - Institute for Studies and Economic Analyses)

  • Marco Malgarini

    (ISAE - Institute for Studies and Economic Analyses)

Abstract

The 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.

Suggested Citation

  • 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).
  • Handle: RePEc:isa:wpaper:65
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    Cited by:

    1. Malgarini, Marco & Margani, Patrizia, 2005. "Psychology, consumer sentiment and household expenditures: a disaggregated analysis," MPRA Paper 42443, University Library of Munich, Germany.

    More about this item

    Keywords

    trading confidence climate; consumption theory; heterogeneous behaviour;

    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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