Original scientific paper
https://doi.org/10.3935/rsp.v31i1.1965
Inflation Inequalities in Croatia
Ivica Rubil
orcid.org/0000-0002-9111-7313
; The Institute of Economics Zagreb, Zagreb, Croatia
*
Marina Tkalec
; The Institute of Economics, Zagreb, Croatia
*
Ivan Žilić
; Croatian National Bank, Zagreb, Croatia
* Corresponding author.
Abstract
Consumer price inflation is traditionally measured by a single number – the official rate calculated and published by national statistical agencies. This approach is characterized by simplicity and practicality, but it ignores the fact that not all households face the same price increase, that is, the fact that the inflation rate, like many other economic variables, has a distribution. Also, due to the way it is calculated, the official inflation rate is biased since it is more similar to the inflation rate relevant to richer households than to that relevant to poorer households. In this paper, we study inflation in Croatia in the period 2001 – 2021 through a distributional prism. Based on micro-data from the Household Consumption Survey, we calculate inflation rates for several types of households, different in terms of income or other characteristics. The results show that there are significant inflation inequalities. For example, for the period 2001 – 2021, the inflation rate for the poorest 10 percent of households is almost 11 percentage points higher than that for the richest 10 percent. Consequently, the official inflation rate, by construction biased towards the rich, is lower than the so-called "democratic" rate, which is by construction impartial.
Keywords
inflation; inequalities; price indices
Hrčak ID:
320598
URI
Publication date:
1.8.2024.
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