Inflation Bites Differently: Household Consumption, Welfare, and Poverty during the 2022 European Energy Crisis
By applying a non-homothetic CES demand system to microdata from Spain and Italy during the 2022 energy crisis, this paper demonstrates that heterogeneous consumption patterns cause poorer households to suffer disproportionately larger welfare losses and that relying on a single representative price index significantly obscures the true distributional impact of inflation on poverty.