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Do Black Households Face Higher and More Volatile Inflation?

Abstract: Inflation affects different households in different ways. I use detailed data on spending in retail outlets by Black and White households in the U.S. and study the racial inflation disparity. I find that Black households experienced slightly higher and significantly more volatile inflation in consumer goods from 2004 to 2020 compared to White households. More than two-thirds of the difference in inflation volatility can be explained by the fact that Black households are disproportionately more likely to consume goods with volatile prices.

Keywords: Race; inflation; laspeyres price index; household consumption; consumption;

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File(s): File format is text/html https://www.richmondfed.org/publications/research/economic_brief/2022/eb_22-25
Description: Briefing


Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2022-07

Volume: 22

Issue: 25

Note: This is the first article in a series by Munseob Lee, Claudia Macaluso (Federal Reserve Bank of Richmond) and Felipe Schwartzman (Federal Reserve Bank of Richmond) on price volatility and how it can vary among families of different demographics.