Variation Across Household in the Rate of Inflation
This paper reports on an empirical investigation of the distribution of inflation rates across households. The study uses a large cross-sectional survey of households to obtain information on the composition of the market bundles of goods and services purchased by each of several thousand households in the U.S. It also uses published data for the U.S. on monthly changes in the separate indices of prices of some fifty expenditure items which comprise consumers' market bundles. With information on price changes for these fifty items and the composition of households' consumption bundles, a price index is computed for each of some 11,000 households separately for several recent periods of time. The distributions of these price indices are studied and the relationships between household characteristics and these price indices are investigated.
On this computationally intensive project I am especially indebted to Kyle Johnson and David Lindauer for careful and thoughtful research assistance. I have benefited from suggestions at seminars at Stanford and NBER and especially from discussions with Moses Abramovitz, Victor Fuchs, Michael Grossman, Ed Lazear, Geoffrey Moore, Jack Triplett, and Yoram Weiss. This research has been supported by a grant to NBER from The Rockefeller Foundation.
Michael, Robert T. "Variation Across Households in the Rate of Inflation." Journal of Money, Credit, and Banking, Vol. 11, No. 1, (February 1979), pp. 32-46.