Do Black Households Face Higher and More Volatile Inflation?

Munseob Lee

Richmond Fed Economic Brief, 2022, vol. 22, issue 25

Abstract: Inflation affects different households in different ways. I use detailed data on spending in retail outlets by Black and White households in the U.S. and study the racial inflation disparity. I find that Black households experienced slightly higher and significantly more volatile inflation in consumer goods from 2004 to 2020 compared to White households. More than two-thirds of the difference in inflation volatility can be explained by the fact that Black households are disproportionately more likely to consume goods with volatile prices.

Keywords: Race; inflation; laspeyres price index; household consumption; consumption (search for similar items in EconPapers)
Date: 2022
Note: This is the first article in a series by Munseob Lee, Claudia Macaluso (Federal Reserve Bank of Richmond) and Felipe Schwartzman (Federal Reserve Bank of Richmond) on price volatility and how it can vary among families of different demographics.
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