The Distribution Of Consumption-expenditure Budget Shares. Evidence From Italian Households

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Executive Summary

This paper explores the statistical properties of Household consumption-expenditure Budget Shares Distributions (HBSDs) - 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. The authors find that HBSDs are fairly stable over time for each specific category, but profoundly heterogeneous across commodity categories. They then derive a parametric density that is able to satisfactorily characterize HBSDs and: is consistent with the observed statistical properties of the underlying levels of household consumption-expenditure distributions; can accommodate the observed across category heterogeneity in HBSDs.

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