The Distribution of Consumption-ExpenditureBudget Shares. Evidence fromItalian Households

This paper explores the statistical properties of household consumption-expenditure budgetshares distributions (HBSDs) —defined as the share of household total expenditurespent for purchasing a specific category of commodities— for a large sample of Italianhouseholds in the period 1989-2004. We find that HBSDs are fairly stable over time foreach specific category, but profoundly heterogeneous across commodity categories. Wethen derive a parametric density that is able to satisfactorily characterize HBSDs and:(i) is consistent with the observed statistical properties of the underlying levels of householdconsumption-expenditure distributions; (ii) can accommodate the observed acrosscategoryheterogeneity in HBSDs.[...]