Press Statement

Preasráiteas

27 July 2022

Go to release: Estimated Inflation by Household Characteristics June 2022

The Central Statistics Office (CSO) has today (27 July 2022) published an update to its first research paper on inflation broken down by various household characteristics up to June 2022.  This publication is categorised as a CSO Frontier Series Output. Particular care should be taken when interpreting the statistics in this research paper as it is based on methodology which continues to be under development. The methods used and the conclusions from the analysis may be subject to further review and refinement.

Commenting on the information presented in this CSO Frontier Series research paper, Joseph Keating, Statistician in the Prices Division, said: “The increasing rate of inflation since the middle of 2021 has prompted greater interest in price change and its effects on households. The Consumer Price Index (CPI) is a measure of average inflation for all households.

However, each household has its own unique consumption pattern of goods and services and therefore its own personal experience of inflation. The updated research paper published by the CSO today attempts to take account of those differences between households and provides an estimated breakdown of the CPI results by household characteristics up to June 2022. This has been calculated by combining the CPI results with more detailed expenditure data from the 2015/16 Household Budget Survey.

The report presents estimates of inflation classified by household income, composition of the household, housing tenure, age of the household reference person, and whether the household is in an urban or rural setting.”

Commenting on the research paper’s results for estimated inflation over 12 months, Joseph Keating continued: “The official measure of inflation as published in the CPI shows that prices for consumer goods and services increased by 9.1% in the year to June 2022. Over the same period, the estimated annual inflation by household income categories showed a range from 8.2% for the top decile of households by income, to 10.0% or more per annum for households in the two lowest income deciles.

In the 12 months to June 2022, household groups which were estimated to have experienced inflation at a higher rate than the official measure of inflation of 9.1% included: Lower income households, with estimated rates of inflation of up to 10.3%; Households that rent their home from a local authority (9.9%); Households renting privately (9.4%); Households where the dwelling is owned outright (9.3%); and Rural households (9.7%).”

Commenting on contributions to inflation, Joseph Keating added: “The cost of energy was one of the major drivers of inflation in the 12 months to June 2022. Transport-related price changes were responsible for almost a third of the 9.1% annual change in the CPI (2.7 percentage points of the 9.1% increase) while Electricity, Gas & Other Fuels contributed more than another quarter of the change (2.5 percentage points).”

Some key findings from the research paper show that: 

• For households in the lowest decile (the lowest 10% by income): Electricity, Gas & Other Fuels was the largest contributor to their estimated inflation rate (3.3 percentage points of 10.0%). This was followed by Rent (2.0 percentage points) and Transport (1.9 percentage points). 
• For households in the top income decile: Transport was the largest contributor to their estimated inflation (2.6 percentage points of 8.2%). This was followed by Electricity, Gas & Other Fuels (1.8 percentage points) and Restaurants & Hotels (1.5 percentage points).
• For households renting from a local authority: Electricity, Gas & Other Fuels was the largest contributor to their annual inflation (3.1 percentage points of 9.9%), followed by Rent (2.1 percentage points) and Transport (1.7 percentage points).
• For households renting privately: Rent made the largest contribution to their annual inflation (3.4 percentage points of 9.4%), followed by Electricity, Gas & Other Fuels (1.9 percentage points) and Transport (1.8 percentage points).
• For rural households: Transport contributed 3.7 percentage points to their annual estimated inflation of 9.7%, while Electricity, Gas & Other Fuels contributed 2.9 percentage points.
• For urban households: Annual estimated inflation for urban households was 8.8%, with Transport and the Electricity, Gas & Other Fuels categories both contributing 2.3 percentage points.
• Where the household reference person is aged under 35, annual inflation was estimated at 8.8%. The main contributors were Rent (2.5 percentage points), Transport (2.1 percentage points) and Electricity, Gas & Other Fuels (1.8 percentage points).
• The main contributors to the estimated inflation for households where the reference person is aged 65 or over were: Electricity, Gas & Other Fuels (3.7 percentage points out of the total of 9.8%) and Transport (2.7 percentage points). Rents contributed just 0.2 percentage points to annual inflation for this household age category.

Further commenting on the research paper’s results over five years, Joseph Keating continued: “Price changes for the different household groups for the five years from June 2017 to June 2022 were also published today. Over that period, overall inflation as measured by the CPI was 12.0%. The lowest income decile experienced an estimated price increase of 13.9% over those five years; the highest income decile had an estimated increase of 10.6%.        

Rural households experienced slightly higher estimated inflation than the CPI over the five years to June 2022 (12.1% versus 12.0%). Inflation estimated for rural households was also higher than the CPI in the final 12 months, June 2021 to June 2022 (9.7% versus 9.1%).

In the five years since June 2017, the estimated inflation experienced by households with the reference person aged 65 or over was higher than the overall CPI (12.3% versus 12.0%). In the 12 months to March 2022, these households also had higher estimated inflation than the CPI (9.8% versus 9.1%).

Households where the household reference person is aged under 35 also had higher estimated inflation than the average CPI since June 2017 (13.1% versus 12.0%) but had lower estimated inflation than the CPI since June 2021 (8.8% versus 9.1%).” 

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