The distribution of households consumption-expenditure budget shares

This paper explores the statistical properties of household consumption-expenditurebudget share distributions —defined as the share of household total expenditure spentfor purchasing a specific category of commodities— for a large sample of Italianhouseholds in the period 1989-2004. We find that household budget share distributionsare fairly stable over time for each specific category, but profoundly heterogeneousacross commodity categories. We then derive a parametric density that is able tosatisfactorily characterize household budget share distributions and: (i) is consistentwith the observed statistical properties of the underlying levels of householdconsumption-expenditure distributions; (ii) can accommodate the observed acrosscategoryheterogeneity in household budget share...