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Inflation Is Higher For The Poor Than For The Rich

Author

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  • Seyfettin Gursel

    (Bahcesehir University Center for Economic and Social Research)

  • Aysenur Acar

    (Bahcesehir University Center for Economic and Social Research)

Abstract

Inflation calculated by Turkish Statistical Institute (TurkStat) captures inflation faced by a representative household since it covers all income and expenditure groups inTurkey. However, inflation faced by households of different income and expenditure groups may differ since different groups consume different baskets of goods and services. In this research brief, we calculated different price indices for each income quintile using the consumption data from Household Budget Survey (HBS) released by TurkStat for the period 2003-2012 (May). Findings indicate that poorer households face higher inflation than richer ones inTurkey. The poorest households (the lowest quintile) face higher inflation levels since price increases in food and energy (electricity, gas and other fuels) are above average increase in prices during this period. The inflation difference between the top income quintile and the lowest income quintile from 2003 to 2006 evolved in favor of the poor households. On the other hand, this trend was reversed against the poor households due to global food and energy price shocks since the second quarter of 2007.

Suggested Citation

  • Seyfettin Gursel & Aysenur Acar, 2012. "Inflation Is Higher For The Poor Than For The Rich," Research Briefs 134, Bahcesehir University, Betam.
    • Handle: RePEc:bae:rbrief:134
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