2007/24 | LEM Working Paper Series | |
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On the distributional properties of household consumption expenditures. The case of Italy. |
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Giorgio Fagiolo, Lucia Alessi, Matteo Barigozzi, Marco Capasso |
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Keywords | ||
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Consumption, Asymmetric Exponential-Power Distribution, Income Distribution, Log-Normal Distribution, Gibrat's Law.
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JEL Classifications | ||
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D3, D12, C12
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Abstract | ||
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In this paper we explore the statistical properties of the
distributions of consumption expenditures for a large sample of
Italian households in the period 1989-2004. Goodness-of-fit tests
show that household aggregate (and age-conditioned) consumption
distributions are not log-normal. Rather, their logs can be
invariably characterized by asymmetric exponential-power densities.
Departures from log-normality are mainly due to the presence of
thick lower tails coexisting with upper tails thinner than Gaussian
ones. The emergence of this irreducible heterogeneity in statistical
patterns casts some doubts on the attempts to explain log-normality
of household consumption patterns by means of simple models based on
Gibrat's Law applied to permanent income and marginal utility.
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