Micro Data Fusion of Italian Expenditures and Incomes Surveys

The aim of this work is to match household consumption information from Indagine sui Consumi delle Famiglie (Household Budget Survey, HBS) by the Italian National Statistical Institute (ISTAT) with Indagine sui Bilanci delle Famiglie Italiane (Survey of Households’ Income and Wealth, SHIW) by the Bank of Italy for the year 2010. The work offers a review of the main matching methodologies, coupled with a discussion of the underlying hypotheses (such as the CIA) which, in our case, are less demanding to assume given the presence consumption aggregates as common variables between the two surveys. Moreover, some tests measuring the validity of the matching procedure are presented in order to check the preservation of joint distributions. The resulting sample is expected to allow better distributional and micro-econometric analyses on consumption income and wealth (e.g. Engel curves, consumption age/income profiles). Moreover, the very detailed integrated dataset would constitute a platform for an integrated microsimulation analysis of direct, indirect and wealth tax reforms which, so far, has not been feasible taking available sample surveys separately. Our matching achieves a good preservation of the marginal distributions of all consumption aggregates from the donor survey. However, a thorough comparison of the original distributions suggests that the HBS is a convenient donor for the imputation of non-durable commodities only. Consumption aggregates closer to the concept of wealth (such as durables and the extraordinary expenditure for dwelling maintenance) or savings (such as mortgages and private pensions) prove to be better assessed by the longer - and more issue-specific - recall of the SHIW. As secondary outcomes, the information derived from HBS on non-durables entails an increase in the dispersion and an upward adjustment of consumption profiles in the synthetic distribution relative to SHIW. This implies also a downsized average propensity to save for the household sector which gets closer to the National Accounts figures.