A Hierarchical Model for Analysing Consumption Patterns in Italy Before and During the Great Recession

The paper aims to explore how the Great Recession of the twenty-first centuryhas impacted on the consumption behaviour of Italian households. Following a hierarchicalapproach, the study investigates differences in consumption behaviour at both householdand regional levels. Using micro data on Italian Household Expenditure for the years 2002,2006, 2010 and 2012, multilevel and two-step regression models have been estimated. Theanalysis has been performed for four different consumption categories: food, housing,work-related and leisure. The analysis reveals that the economic crisis led to increasingincome elasticity for each category of consumption, especially for food, the most essentialbasic good. The crisis also created more marked regional disparities in the average level ofexpenditure.