The Effects of Various Motives to Save Money on the Propensity of Italian Households to Allocate an Unexpected Inheritance Towards Consumption

Quality and Quantity

16 Pages Posted: 15 May 2015 Last revised: 7 Jun 2016

Date Written: June 6, 2016

Abstract

We examine the effects of various motives to save money on the propensity of Italian households to allocate an unexpected inheritance towards consumption. To achieve this objective, we use microdata collected by the Bank of Italy in a structured questionnaire as part of the Italian Survey of Household Income and Wealth for 2012, which consists of a sample of 8,151 Italian households. Among our results of interest, we found that families who are motivated to save money because they are planning to set up a new business, to invest in an existing business, to travel on holiday, or to make large purchases (such as automobiles, furniture, and so forth) are more likely to allocate an income shock towards consumption than families who are motivated by the need to save money to protect themselves (such as by providing for unexpected cash needs and/or retirement). We also found that such motivations have a non-linear (increasing/decreasing) effect on response behaviours to income shocks.

Keywords: consumption; income shock; Italian Survey of Household Income and Wealth; beta regression model; fractional probit model; ordered logit model

JEL Classification: C14; D12; I38

Suggested Citation

Zanin, Luca, The Effects of Various Motives to Save Money on the Propensity of Italian Households to Allocate an Unexpected Inheritance Towards Consumption (June 6, 2016). Quality and Quantity, Available at SSRN: https://ssrn.com/abstract=2605746 or http://dx.doi.org/10.2139/ssrn.2605746

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