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Household inflation experiences in the U.S.: a comprehensive approach

Author

Listed:
  • Bart Hobijn
  • Kristin Mayer
  • Carter Stennis
  • Giorgio Topa

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.

Suggested Citation

  • 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
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    File URL: http://www.frbsf.org/publications/economics/papers/2009/wp09-19bk.pdf
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    References listed on IDEAS

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    1. repec:bin:bpeajo:v:2:y:1971:i:1971-2:p:485-498 is not listed on IDEAS
    2. 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.
    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. Kaplan, Greg & Schulhofer-Wohl, Sam, 2017. "Inflation at the household level," Journal of Monetary Economics, Elsevier, vol. 91(C), pages 19-38.
    2. 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).

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    Keywords

    Inflation (Finance) ; Households - Economic aspects;

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