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  1. Inflation heterogeneity across households
    Published: [2024]
    Publisher:  European Central Bank, Frankfurt am Main, Germany

    This paper studies the nature, evolution, and sources of inflation heterogeneity across households in France and Germany. Inflation differences are large and persistent. The two main sources of inflation heterogeneity are spatial differences in the... more

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    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    DS 534
    No inter-library loan

     

    This paper studies the nature, evolution, and sources of inflation heterogeneity across households in France and Germany. Inflation differences are large and persistent. The two main sources of inflation heterogeneity are spatial differences in the prices paid for the same product and differences in the household-specific variety choice within a category. Income heterogeneity by itself is not a relevant determinant of inflation heterogeneity, but due to its correlation with household behaviour, a significant and time-varying inflation difference between income groups emerges. Substitution is strongly behaviour-driven and largely detached from the relative price. The dispersion of the household-level elasticity of substitution does not fully account for the heterogeneity of substitution behaviour. Substitution does not reduce the dispersion of inflation, confirming the central role of preference heterogeneity in inflation measurement.

     

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    Source: Union catalogues
    Language: English
    Media type: Ebook
    Format: Online
    ISBN: 9789289963787
    Other identifier:
    hdl: 10419/297338
    Series: Working paper series / European Central Bank ; no 2898
    Subjects: inflation; household heterogeneity; shopping behaviour; substitution; inequality
    Scope: 1 Online-Ressource (circa 74 Seiten), Illustrationen