This paper investigates the distribution of inflation rates across Italian households over the period 2015-23, focusing on the most recent developments, in order to assess the heterogeneity of inflation experiences based on the consumption basket, which in turn depends on income and other socio-demographic characteristics. Our analysis combines information from the Household Budget Surveys with Harmonised Index of Consumer Prices data.
The results show that since early 2021, households with lower consumption expenditures have been exposed to a significantly higher increase in the cost of living compared with the rest of the population. Relative price fluctuations have particularly hurt households living in the South and those where the main income earner is older, less educated or employed in blue-collar jobs. In 2021-22, the share of energy goods in household expenditure increased, reducing the consumption of non-essential goods.
Forthcoming in: Italian Economic Journal / Rivista italiana degli economisti.
