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Household Level Inflation Rates and Inflation Inequality in Turkey

Author

Listed:
  • Akkoc, Ugur

    (Pamukkale University)

  • Kizilirmak, Burca

    (Ankara University)

Abstract

This paper aims to explore the distribution of inflation rates at the household level and estimate their determinants using the Household Budget Surveys. It derives the household level inflation rates using the democratic price index and analyzes inflation inequality and its persistency. The main contributions of the paper are as follows: (i) to determine inflation inequality by examining the distribution of household-specific inflation rates calculated by the democratic price index, (ii) to examine new dimensions of inflation inequality in Turkey by income groups and household characteristics, (iii) to estimate the micro-level determinants of household inflation rates in Turkey. Results suggest that inflation rates are lower for the rich than for the poor, and the distribution of inflation has worsened the income inequality in Turkey. This analysis provides rich information for monetary policymakers. Households have different responses to price changes or monetary policy tools because of their unique characteristics and economic conditions. Thus, we need to know how inflation rates differ at the household level in order to understand how monetary policy and inflation affect the well-being of households.

Suggested Citation

  • Akkoc, Ugur & Kizilirmak, Burca, 2021. "Household Level Inflation Rates and Inflation Inequality in Turkey," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 12(1), pages 17-32, January.
    • Handle: RePEc:ris:buecrj:0528
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    Cited by:

    1. Shuyun Li & Mingxue Wei & Ehsan Elahi & Zainab Khalid & Shaozhi Chen, 2023. "The Sustainable Impact of Import on Chinese Residents’ Happiness: Evidence from CGSS," Sustainability, MDPI, vol. 15(8), pages 1-18, April.

    More about this item

    Keywords

    Consumption; Inflation; Inflation Inequality; Monetary Policy; Household Economics;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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