On Italian Families’ Inability to Meet Expected Expenses: A Possible Measure and Its Determinants

Abstract An important economic and social issue that has emerged in recent years in the Italian political debate is the difficulty many families face in making ends meet. In this work, we aim to measure Italian households’ inability to cover their expected annual expenses with their disposable income by analysing the probability that these expenses exceed household disposable income. To account for the dependence between income and expenses, we specify the joint distribution using a copula approach. Utilizing data from the Survey on Household Income and Wealth (SHIW) conducted by the Bank of Italy, we introduce regression models to identify the socio-demographic and economic determinants that influence this measure. Our methodology also enables us to identify subgroups within the population that experience varying degrees of difficulty in meeting their expected expenses with disposable income.