Who Suffers the Most From the Cost of Living Crisis?

ABSTRACT This paper constructs household‐specific Laspeyres indexes for different groups of households to quantify the differences in the distribution of the burden of high inflation among the populations of countries in Europe and Central Asia. The analysis demonstrates that the cost of living crisis of 2022–23 has had a heterogeneous impact on European populations. Poor households appear to suffer the most from rising food and energy prices. Poverty and inequality rates, as well as the profiles of the poor based on household‐specific inflation rates, systematically differ from those based on the standard consumer price index measure of inflation.