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The social cost of inflation: Intergroup inflation burden and inequality in Russia


TERRA ECONOMICUS, Vol. 24, No 2

Citation: Klachkova O., Tikhturova A. (2026). The social cost of inflation: Intergroup inflation burden and inequality in Russia. Terra Economicus 24(2), 88–100 (in Russian). DOI: 10.18522/2073-66062026-24-2-88-100


This paper examines the heterogeneity of the inflation burden across households with different income levels in Russia over 2010–2022. In a context of heightened inflation volatility and tighter monetary policy, the question of who ultimately bears the costs of rising prices becomes especially important. Using the expenditure structure of income deciles, we construct an intergroup consumer price index to measure differences in “personal inflation” and assessing their impact on real-income dynamics. The results show that low-income households systematically face higher inflation than better-off groups, and this gap widens during crisis periods. As a consequence, using the aggregate consumer price index to deflate incomes leads to an understatement of economic inequality. Average inflation measures can therefore obscure the true dynamics of purchasing power, while the social cost of inflation remains underestimated. The results show that accounting for between-group inflation differentials is a necessary condition for an accurate assessment of real incomes and for designing targeted redistribution policies. A limitation of the paper is its reliance on broad consumption categories (food commodities, non-food commodities, and services) without capturing within-category variation in prices and product quality, which points to promising directions for future research using micro-level data.

Keywords: inflation burden; income inequality
JEL codes: D31, E31, I32



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Publisher: Southern Federal University
ISSN: 2073-6606













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