Household-Level Food Price Inflation Heterogeneity: Evidence and Insights from the U.S. Consumer Panel Data (2013-2023)

This paper studies the heterogeneity in household-level food price inflation in the United States from 2013 to 2023 using the NielsenIQ Consumer Panel data. We examine how food price inflation impacts households differently based on their demographic characteristics and shopping behavior. Using detailed scanner data on prices paid and quantities purchased, we calculate household-specific inflation rates, revealing substantial variation in inflation experience across households - especially pronounced during periods of high inflation such as the post-pandemic inflation surge. Our analysis also reveals significant inflation inequality across households, with higher rates experienced by low-income, older, single-family, Asian, and Black households. Our estimation indicates that households earning less than $20,000 experience inflation rates that are between 0.02 to 0.31 percentage points higher than households earning $100,000 or more. Furthermore, we explore the role of shopping behaviors in mitigating inflation, demonstrating that households can reduce inflation exposure through strategies like increasing shopping frequency, shopping across multiple retailers, and purchasing products on sale/discount, and how such strategies evolved during recent period of elevated inflation. We also examine product substitution behavior and highlight how households shift consumption patterns towards cheaper products during inflationary periods. Overall, our findings underscore the necessity of policy measures that account for this kind of heterogeneity to effectively address the disproportionate burden of inflation across vulnerable groups.