A Structural Equation Model to analyze the Household Budget: a case study

The Household Budget Survey (HBS) constitutes the basic information to describe, analyse and interpret consumption expenditure of households. The survey, based on a sample of households, collects data on household expenditures for consumption, with a particular focus on social and economic aspects of households' living conditions. The survey allows both the qualitative and quantitative analysis of living standards and consumption behaviours of the households, referred to different typologies and territorial and social contexts. The main purpose of the survey is, in fact, to collect information on the structures and levels of consumption expenditure by the main socio, economic and territorial characteristics of the households; all expenditures afforded by the households to purchase goods and services are registered. The definition of consumption expenditure includes also goods coming from the households garden or farm directly consumed by the household itself (self-consumption), the goods and services provided by the employers as salary, the imputed rent for houses occupied by the owner or used without a charge. In order to draw a complete picture, the survey collects data on expenditures for food and beverages, housing, furniture, clothes and shoes, health, transport and communication, recreation, culture and education and other goods and services not already mentioned, in addition to information on the household members (relationship, age, marital status, education level, professional condition and position) and on housing characteristics. The results are presented by groups or categories of expenditure (those considered more relevant), analysed by territorial breakdown, household size and typology, occupational and professional condition of the household head, as well as by those characteristics which, more than other, influence and characterise the consumption levels and behaviour. The data obtained have been elaborated by a Factorial Analysis in order to identify the main aspects that influence the habits of Italian Household. Starting from these results, we hypothesised the relationship among latent variables and we used structural equation model to analyze the data gathered.