Place of life, type of residence, age… These criteria play a role in the effect of inflation on the wallets of the French.
+ 5.9% in one year, and in particular + 22.7% for energy in one year in August, and + 7.9% for food. Inflation continues to rage in France, and affects purchasing power, forcing the government to take the checkbook to limit the consequences, with the fuel discount, the shield tariff for energy or the transport premium.
If inflation affects many sectors indiscriminately, the French will not be affected in the same way depending on their situation. “The prices of all goods and services do not develop in the same way. In fact, each household has its own inflation, depending on the structure of its consumption”, explained France Info Mathieu Plane, economist of ‘ OFCE and specialist in purchasing power issues.
Rural people are more affected than city dwellers
Among the factors at play, the place of life, which affects the items of expenditure and therefore the consequences of inflation. According to INSEE, residents of rural areas spend a larger share of their income than average on fuel and energy bills: 12% against 7% for a household in a large city and 6% only for a home in the conurbation of Paris., for example.
However, inflation particularly affected energy and fuels, with +22.7% for a year in August and +28.7%, thus affecting more inhabitants of rural areas than those city residents in their budget. In April according to INSEE, households in rural areas suffered an average inflation of 5.9% during a year, against only 4% for the inhabitants of the conurbation of Paris (4%).
The inhabitants of Hauts-de-France are the most affected
According to the same logic, the inhabitants of Hauts-de-France are the most affected by inflation, explains INSEE. In question, gas-heated housing and longer than average home-to-work trips and often made by car.
The lowest 10% are more affected
Another factor that plays a role is income. According to a study by INSEE, which although from 2017, it is the most moderate that devotes the largest part of their income to costs related to energy and fuel.
According to this study, energy bills represent 6% of the costs of the 10% most dangerous households, and fuel 4%. The expenses represent only 4 and 3% of the expenses of the richest households, and 5% of the expenses of the middle class households. The particularly significant increase in prices in these two sectors therefore has a greater impact on the budgets of the most moderate.
The effect of rising food prices
Another item of expenditure that has been particularly affected by inflation in recent months is food. In one year, the price of food jumped by more than 7%. Here too, the most modest are most affected. According to the same INSEE study, the 10% of the poorest households spent an average of 19% of their expenses on food purchases, against 18% for the middle class and 15% for the 10% of wealthiest households.
The effect of inflation according to income is that in April, the inflation of the lowest 10% is 0.4 points higher than the national average, according to a study by INSEE. On the other hand, the richest recorded an inflation rate below average (-0.1 points).
The older we are, the greater the impact of inflation
The most modest of all are the most affected because inflation has a greater impact on discount stores. The proof is: the inflation reached 8.66% in August in the surfaces like Aldi or Lidl against 7.70% in the hypermarkets. In question, hard-discounters’ margins are too tight to absorb price increases. It is the same thing in the private label segment, where prices increased by 10.67%.
Age also has an impact on the impact of inflation, says INSEE. In question, very different costs of an age. The over 75s spent 8% of their spending on energy bills before the crisis, compared to 3 to 6% for the rest of the population. The same is true for food, an expense whose share increases with age: it represents 23% of the expenses of those over 75, against 11% of those under 25. A sector where prices jump over at 7% a year. Also according to the INSEE study published in June, in April, inflation was on average 4% for a year for those under 30, and jumped to 5.7% for those over 75.
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