Income-Specific Inflation Rates in Pakistan

In this paper an attempt has been made to find the inflation rates which were faced by households belonging to different income brackets and living in different areas. The results of this study do not show any consistent pattern of inflation being higher or lower for the rich or the poor households. During 1971-72 and between 1978-79 and 1980-81, households in the lower income brackets were found to be facing lower inflation rates. These were the years when food prices rose at lower rates than those of the prices of non-food items. These differences, however, disappeared in 1981-82 when food prices rose sharply, resulting in a higher inflation rate for the poor than for the rich. The numerical magnitudes of the differences were, however, not very high