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Changes in Consumption Behaviour: Italy in the Early 1990s

Author

Listed:
  • Charles Grant

    (University College London, FCC and European University Institute)

  • Raffaele Miniaci

    (University of Padua)

  • Guglielmo Weber

    (University of Padua, IFS and CEPR)

Abstract

This paper investigates the causes of the Italian consumption decline of the early 1990’s by estimating deviations from normal consumption for 1985-94. The paper uses household data from the Survey of Family Budgets (SFB) from ISTAT, a particularly rich but relatively unexplored source containing detailed demographic and expenditure information for over 30,000 Italian households each year. The paper finds that the decline in consumption was larger for the working age households and that it was larger in the south, among the self-employed, and among public sector employees. The decline can be dated from the third quarter of 1992. A simple simulation shows how these results can be reconciled with the life-cycle model of consumption in which there is a permanent and unexpected shock to lifetime income induced by the pension and other reforms introduced by the Amato government.

Suggested Citation

  • Charles Grant & Raffaele Miniaci & Guglielmo Weber, 2002. "Changes in Consumption Behaviour: Italy in the Early 1990s," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 61(1), pages 61-101, June.
    • Handle: RePEc:gde:journl:gde_v61_n1_p61-101
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    References listed on IDEAS

    as
    1. 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.
    2. Erich Battistin & Raffaele Miniaci & Guglielmo Weber, 2003. "What Do We Learn from Recall Consumption Data?," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
    3. Attanasio, Orazio P, et al, 1999. "Humps and Bumps in Lifetime Consumption," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 22-35, January.
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    6. Attanasio, Orazio P & Weber, Guglielmo, 1994. "The UK Consumption Boom of the Late 1980s: Aggregate Implications of Microeconomic Evidence," Economic Journal, Royal Economic Society, vol. 104(427), pages 1269-1302, November.
    7. Orazio P. Attanasio & Hilary Williamson Hoynes, 2000. "Differential Mortality and Wealth Accumulation," Journal of Human Resources, University of Wisconsin Press, vol. 35(1), pages 1-29.
    8. Raffaele Miniaci & Guglielmo Weber, 1999. "The Italian Recession Of 1993: Aggregate Implications Of Microeconomic Evidence," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 237-249, May.
    9. Marco Manacorda, 2002. "Wage Indexation and the Evolution of Returns to Education in Italy, 1978–92," International Economic Association Series, in: Richard B. Freeman (ed.), Inequality Around the World, chapter 4, pages 60-83, Palgrave Macmillan.
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    More about this item

    Keywords

    consumption; micro data; business cycle;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • 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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