The Expected, Perceived, and Realized Inflation of US Households Before and During the COVID19 Pandemic

Abstract

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COVID-19 inflation weights in the UK and Germany

“…The differences in the inflation bias between the income groups is at most 0.1 percentage points, indicating that high-income consumers suffered similar inflation. These results are in contrast with the ones for the US of Cavallo (2020) and Weber et al (2023) , who find that inflation was significantly higher for low-income households in the first months after the beginning of the pandemic. One possible rationalization is that income inequality is lower in the UK and Germany compared to the US, so consumption baskets are more similar across income levels (for the US ( Weber et al, 2023 ) perform a decomposition analysis and conclude that the difference in inflation levels across households is largely explained by the difference in the consumption baskets rather than prices paid.)…”

“…These results are in contrast with the ones for the US of Cavallo (2020) and Weber et al (2023) , who find that inflation was significantly higher for low-income households in the first months after the beginning of the pandemic. One possible rationalization is that income inequality is lower in the UK and Germany compared to the US, so consumption baskets are more similar across income levels (for the US ( Weber et al, 2023 ) perform a decomposition analysis and conclude that the difference in inflation levels across households is largely explained by the difference in the consumption baskets rather than prices paid.) Another explanation may be related to the higher urgency that low-income consumers have to shift their consumption to lower inflation CPI categories.…”

“…The gender information of the account holder is limited to the UK data and it shows that men and women roughly experienced the same inflation bias. In contrast to the evidence for the US ( Cavallo, 2020 , Weber et al, 2023 ), we find that differences across income groups are small. One way to rationalize these results is to relate them to the lower income inequality in the UK and Germany compared to the US, which likely make consumption baskets more similar across income levels.…”

“…In another study, Weber et al (2023) explore the link between inflation expectations and realized inflation in the US before and during the pandemic employing quarterly consumer surveys with information on household purchases and prices from the Nielsen Homescan Panel. They calculate inflation rates for each product module (using a broader classification of product modules allows for substitution across goods and stores, which is particularly relevant during stock-out periods) and construct a measure of household-specific realized inflation as an expenditure-weighted average of module-specific inflation.…”

China’s growing influence in the global carrageenan industry and implications for Indonesia

“…The price data suggests that there has been a general increase in demand for gelling agents, potentially driven by the growing demand for processed foods and changing global economies. However, in current economic conditions of price inflation and economic stagnation (Ha et al 2022 ; Ozili and Arun 2023 ; Weber et al 2023 ) places pressure on both consumers and food manufacturers to seek value-for-money inputs and reduce production costs (Campbell and Hotchkiss 2017 ). Moreover, despite carrageenan's extensive historical usage in the food industry and its compliance with strengthened regulations, it has become the subject of increased regulatory and consumer scrutiny due to concerns regarding its safety (Thomas 1997 ; Bixler 2017 ; EFSA et al 2018 ).…”