Heating the Inflation Inequality in Greece

ABSTRACT The aim of the current study is twofold. First, we assess the household inflation inequality in Greece not only across different income groups but also across other households' social and economic characteristics, such as occupational status and household composition, among others. Second, we investigate the role of energy prices in driving the inflation inequality. The picture that emerges from our results is that the strongest inflation differences are evident at the different household income categories, with poorer households experiencing significantly higher inflation. Other characteristics that exhibit inflation gaps across households include the size of the household, the profession of the lead member of the household, as well as the composition of the household. Energy prices play a significant role in driving this inflation inequality across households' income categories, with the natural gas prices assuming the crucial role. Policy implications, such as the need for energy subsidies, cuts in energy prices' VAT, and index‐linked social benefits, to alleviate part of the burden created by the inflation inequality, are also discussed.