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Look Within: Demographic Grouping Masks Inflation Inequality

Author

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  • Kelsey O’Flaherty

Abstract

The recent inflation surge prompted renewed assessments of inflation inequality. Examinations of inflation by income or other demographic groups point to a shrinking or stable inflation gap between high- and low-income households in 2022. At the same time, research using scanner data shows grocery inflation becoming much more disparate with rising inflation. I show that aggregating households into demographic groups not only masks the majority of heterogeneity, but fails to capture important dynamics between that heterogeneity and the level of inflation.

Suggested Citation

  • Kelsey O’Flaherty, 2026. "Look Within: Demographic Grouping Masks Inflation Inequality," AEA Papers and Proceedings, American Economic Association, vol. 116, pages 562-567, May.
    • Handle: RePEc:aea:apandp:v:116:y:2026:p:562-567
    DOI: 10.1257/pandp.20261062
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    More about this item

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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