Inflation Differentials among Czech Households

Pavel Hait and Petr Janský
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Pavel Hait: Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic

No 2014/08, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

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.

Keywords: households; inflation; inflation differentials; relative prices (search for similar items in EconPapers)
JEL-codes: D12 H22 I31 (search for similar items in EconPapers)
Pages: 24pages
Date: 2014-04, Revised 2014-04
New Economics Papers: this item is included in nep-tra
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Inflation Differentials among Czech Households (2016)
Working Paper: Inflation Differentials among Czech Households (2014)
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