Households' composition of consumption expenditures varies depending on their income level. Low-income households spend a larger proportion of their total consumption expenditure on necessities, such as food and electricity. The price developments of different goods, and thus the inflation experienced by households, differ among households according to their consumption compositions. Systematically higher price increase on goods that make up a larger part of the budget for low-income households implies that their real income grows relatively less than that of high-income households, even with the same nominal growth in income.
We use the model system LOTTE to calculate price indices for every household in Norway. Based on this analysis, we find that inflation during the period from 2013 to 2022 has been somewhat higher for households with low wage incomes. This applies particularly in recent years.