An analysis of the Consumer Price Index (CPI), adjusted for the consumption baskets of different income deciles, reveals an inverse relationship between household income and inflation. In simpler terms, the lower a household's income, the higher its personal cost-of-living index tends to be.
This outcome is largely due to the structure of spending among lower-income households. Basic expenses such as food and housing—which make up a larger share of the consumption basket for lower deciles—have experienced the steepest price increases in recent years. As a result, inflation disproportionately impacts the poor, exacerbating social and economic inequality.