Demographic shifts reshape Italian household spending
A Banca d'Italia paper reveals that demographic changes significantly impacted Italian household consumption between 1997 and 2023. The study finds a decline in real average household expenditure, primarily driven by smaller household sizes.
Smaller households, lower spending
A new Banca d'Italia paper quantifies how demographic shifts have reshaped Italian household consumption from 1997 to 2023.
Researchers Concetta Rondinelli, Federico Tullio, and Francesca Zanichelli found that average real household expenditure declined significantly over this period.
While population ageing had only a limited impact on this trend, the decline in average household size and the reduced share of couples with children played a crucial role.
A counterfactual exercise estimates that had Italy's demographic structure remained unchanged since 1997, the decline in household consumption would have been approximately 4 percentage points smaller.
These demographic changes, however, mitigated the decline in per-capita consumption, indicating a complex interplay of factors.
Microdata reveals spending patterns
The analysis relies on microdata from the Italian Household Budget Survey (HBS), providing detailed insights into consumption expenditure and socio-demographic characteristics of resident households.
Unlike National Accounts, HBS allows for granular analysis of household heterogeneity, though it lacks income and wealth data.
The authors meticulously reconstructed and harmonised HBS microdata from 1997 to 2023 to address discontinuities from survey changes and classification updates (ECOICOP and COICOP 2018).
This extensive data work ensures comparability for long-run trends, enabling a robust examination of demographic impacts on household, individual, and equivalised consumption measures.
Beyond the aggregate numbers
This study offers crucial micro-level detail often obscured by aggregate consumption figures.
It underscores that policy responses to economic stagnation must consider evolving household structures, not just broad demographic shifts.
However, the absence of income and wealth data in the HBS limits a holistic understanding of household financial resilience.