Look Within: Demographic Grouping Masks Inflation Inequality

Kelsey O’Flaherty

AEA Papers and Proceedings, 2026, vol. 116, 562-567

Abstract: The recent inflation surge prompted renewed assessments of inflation inequality. Examinations of inflation by income or other demographic groups point to a shrinking or stable inflation gap between high- and low-income households in 2022. At the same time, research using scanner data shows grocery inflation becoming much more disparate with rising inflation. I show that aggregating households into demographic groups not only masks the majority of heterogeneity, but fails to capture important dynamics between that heterogeneity and the level of inflation.

JEL-codes: C43 D12 D63 E31 L81 (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1257/pandp.20261062

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