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Inflation Differentials among Czech Households

Author

Listed:
  • Pavel Hait
  • Petr Jansky

Abstract

Inflation rates have traditionally been measured by the annualized percentage change in the price level of a market basket of consumer goods and services purchased by households. The market basket represents the spending patterns of average household. However, households differ in their spending patterns and there are differences in the price changes of various goods and services. Therefore, different households experience different inflation rates. This paper finds that these differences have been significant in the Czech Republic during the period 1995-2010. Only around 60 % of households actually experienced an inflation rate that was similar to the national average. Furthermore, the higher the average inflation rate over time, the lower the percentage of households whose inflation rate was similar to that average. The main determiners of inflation were expenditures for housing and energy and, especially for low-income households and pensioners, expenditures on food and non-alcoholic drinks. In most years, pensioners and low-income households faced significantly higher inflation rates than the average rate for the whole population.

Suggested Citation

  • Pavel Hait & Petr Jansky, 2014. "Inflation Differentials among Czech Households," CERGE-EI Working Papers wp508, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp508
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    References listed on IDEAS

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    Cited by:

    1. Shireen AlAzzawi, 2017. "Did the Cost of Living Rise Faster for the Rural Poor?," Working Papers 1091, Economic Research Forum, revised 05 Apr 2017.
    2. Pirmin Fessler & Friedrich Fritzer & Mirjam Salish, 2023. "Who pays the price when prices rise?," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q4/22-Q1/, pages 67-84.
    3. Petr Janský & Klára Kalíšková & Daniel Münich, 2016. "Does the Czech Tax and Benefit System Contribute to One of Europe’s Lowest Levels of Relative Income Poverty and Inequality?," Eastern European Economics, Taylor & Francis Journals, vol. 54(3), pages 191-207, May.
    4. Biljana Jovanovic & Marko Josimovski, 2021. "Income-specific inflation rates and the effects of monetary policy: the case of North Macedonia," Working Papers 2021-01, National Bank of the Republic of North Macedonia.
    5. Olegs Krasnopjorovs, 2022. "Whether Low-Income Households and Retirees Face Higher Inflation? Evidence from Latvia," Post-Print hal-03861129, HAL.

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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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