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Inflation heterogeneity at the household level

Author

Listed:
  • Strasser, Georg
  • Messner, Teresa
  • Rumler, Fabio
  • Ampudia, Miguel

Abstract

Inflation affects the purchasing power of households. This paper documents large, idiosyncratic inflation differences between households in their everyday shopping. Low-income households have experienced higher inflation in the last ten years, but the difference to richer households has been small and time varying. Household-specific behaviour appears to dominate inflation differences within countries. Between countries, multinational retail chains not only differentiate products by branding, but also charge different prices for identical products. Retailers continue to differentiate prices along national borders, even within largely integrated economic regions. Price changes, however, are broadly aligned across borders within the same retailers. JEL Classification: D12, D3, D43, E31, F15, F4

Suggested Citation

  • Strasser, Georg & Messner, Teresa & Rumler, Fabio & Ampudia, Miguel, 2023. "Inflation heterogeneity at the household level," Occasional Paper Series 325, European Central Bank.
    • Handle: RePEc:ecb:ecbops:2023325
    Note: 1137785
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    File URL: https://www.ecb.europa.eu//pub/pdf/scpops/ecb.op325~7422ebe3c1.en.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ampudia, Miguel & Ehrmann, Michael & Strasser, Georg, 2023. "The effect of monetary policy on inflation heterogeneity along the income distribution," Working Paper Series 2858, European Central Bank.

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    More about this item

    Keywords

    consumer prices; heterogeneous agents; inequality; inflation; substitution;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D3 - Microeconomics - - Distribution
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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