Working Paper: NBER ID: w0943
Authors: Michael J. Boskin; Michael D. Hurd
Abstract: This paper presents new evidence on cost-of-living indices and annual inflation rates for the elderly population as well as the general population. It employs a now fairly widely accepted adjustment for the inappropriate treatment of housing in the Consumer Price Index. We disaggregate by five-year age cohorts for the elderly, and analyze various features of the differences in the inflation faced by the elderly and the general population, as well as within the elderly group itself. We conclude that, conditional on a housing adjustment, the inflation experience of the elderly from 1961-1981 was quite similar to the general population, both cumulatively and year-by-year.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Treatment of housing in the CPI (R31) | Overstatement of inflation rates (E31) |
| Overstatement of inflation rates (E31) | Affecting indexing of social security and retirement benefits (H55) |
| Differences in expenditure shares among the elderly (D12) | Substantial differences in impact of inflation on living standards (E31) |
| Cumulative cost of living for all age groups (adjusted for housing) (J39) | Virtually identical (less than 1% difference) (Y10) |
| Annual inflation rates for the elderly and nonelderly (J14) | Quite similar, no year showing a difference exceeding one percentage point (Y10) |
| Historical evidence (N00) | Does not support the need for a separate cost-of-living index for the elderly (J14) |