The uneven impact of high inflation
Inflation indices – such as the national Consumer Price Indices (CPI) and the EU Harmonised
Indices of Consumer Prices (HICP) – measure price changes for the overall economy,
which may not reflect the inflation experience of an individual household or group
of households. This paper contributes to previous studies of the distributive impact
of recent high inflation in EU Member States. Producing more granular and recent results,
this paper finds a substantial rise in effective inflation dispersion across households
and confirms that lower-income households continue to experience higher inflation.
This inflation gap remains even after energy prices have eased and when controlling
for other household characteristics. Results also show that the distributive impact
of inflation on household groups has varied over time, as changes in relative prices
across the inflationary period have influenced the extent of the impact of inflation
across population groups. Finally, differences in effective inflation rates have cumulated
over time, particularly for households with lower-income and headed by people aged
60 years or more and with lower levels of education.
Available from October 03, 2023
In series:OECD Papers on Well-being and Inequalitiesview more titles