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Household Inflation Experiences in the U.S.: A Comprehensive Approach

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Abstract

We present new measures of household-specific inflation experiences based on comprehensive information from the Consumer Expenditure Survey (CEX). We match households in the Interview and the Diary Surveys from the CEX to produce both complete and detailed pictures of household expenditures. The resulting household inflation measures are based on a more accurate and detailed description of household expenditures than those previously available. We find that our household-based inflation measures track aggregate measures such as the CPI-U quite well and that the addition of Diary Survey data induces small but significant differences in the measurement of household inflation. The distribution of inflation experiences across households exhibits a large amount of dispersion over the entire sample period. In addition, we uncover a significantly negative relationship between mean inflation and inflation inequality across households.

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  • Bart Hobijn & Kristin Mayer & Carter Stennis & Giorgio Topa, 2009. "Household Inflation Experiences in the U.S.: A Comprehensive Approach," Working Paper Series 2009-19, Federal Reserve Bank of San Francisco.
    • Handle: RePEc:fip:fedfwp:2009-19
    DOI: 10.24148/wp2009-19
    Note: PDF date: September 30, 2009.
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    References listed on IDEAS

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    1. Bart Hobijn & David Lagakos, 2005. "Inflation Inequality In The United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(4), pages 581-606, December.
    2. Arthur M. Okun, 1971. "The Mirage of Steady Inflation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 2(2), pages 485-498.
    3. Pollak, Robert A, 1980. "Group Cost-of-Living Indexes," American Economic Review, American Economic Association, vol. 70(2), pages 273-278, May.
    4. Hamilton, Bruce W., 2001. "Black-White Differences in Inflation: 1974-1991," Journal of Urban Economics, Elsevier, vol. 50(1), pages 77-96, July.
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    Cited by:

    1. Rossmann, Tobias, 2019. "Economic Uncertainty and Subjective Inflation Expectations," Rationality and Competition Discussion Paper Series 160, CRC TRR 190 Rationality and Competition.
    2. Rossmann, Tobias, 2019. "Does Experience Shape Subjective Expectations?," Rationality and Competition Discussion Paper Series 181, CRC TRR 190 Rationality and Competition.
    3. Kofi Appiah Mensah, 2026. "Impact of Household Debt on Ownership of Financial Assets," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 18(5), pages 1-14, May.
    4. Selçuk Gemicioğlu & Burça Kızılırmak & Uğur Akkoç, 2024. "Relative contributions of indirect taxes and inflation on inequality: What does the Turkish data reveal?," Review of Development Economics, Wiley Blackwell, vol. 28(1), pages 286-309, February.
    5. Tavares, Francisco, 2021. "Inflation heterogeneity and its impact on inequality: evidence from the United States," MPRA Paper 105461, University Library of Munich, Germany.
    6. Kaplan, Greg & Schulhofer-Wohl, Sam, 2017. "Inflation at the household level," Journal of Monetary Economics, Elsevier, vol. 91(C), pages 19-38.
    7. Wändi Bruine de Bruin & Simon M. Potter & Robert W. Rich & Giorgio Topa & Wilbert Van der Klaauw, 2010. "Improving survey measures of household inflation expectations," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 16(Aug/Sep).
    8. Nikoleta Anesti & Edward Hill & Andreas Joseph, 2025. "Inflation Attitudes of Large Language Models," Papers 2512.14306, arXiv.org.

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    Keywords

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    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
    • D39 - Microeconomics - - Distribution - - - Other

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