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Inflation inequality in Italy

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  • Massimo Baldini

Abstract

Inflation is usually assumed to affect all households with the same intensity. Since relative prices are subject to continuous changes, each household, depending on its specific pattern of consumption, is however characterised by a specific inflation rate. With the help of a rich set of microdata, this paper studies the distribution of inflation rates across Italian households during the period 1986-2004. The main findings are that rich households faced on average a slightly higher inflation rate than poor households, and that some demographic characteristics have been systematically associated with higher price increases. Also in 2002, the year of the changeover, inflation has been slightly higher for the rich. Using individual prices indexes, it is finally possible to show that, in the last few years, real living standards for many families have worsened.

Suggested Citation

  • Massimo Baldini, 2005. "Inflation inequality in Italy," Center for the Analysis of Public Policies (CAPP) 0008, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    • Handle: RePEc:mod:cappmo:0008
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    References listed on IDEAS

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    1. Tito Boeri & Andrea Brandolini, 2004. "The Age of Discontent: Italian Households at the Beginning of the Decade," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 63(3-4), pages 449-487, December.
    2. Paolo Del Giovane & Roberto Sabbatini, 2004. "L�introduzione dell�euro e la divergenza tra infl azione rilevata e percepita," Temi di discussione (Economic working papers) 532, Bank of Italy, Economic Research and International Relations Area.
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    Cited by:

    1. Alessandra Cepparulo & Francesca Gastaldi & Paolo Liberati, 2010. "The distributional and welfare impact of inflation in Italy," Working Papers in Public Economics 134, University of Rome La Sapienza, Department of Economics and Law.

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