Age-Specific Consumer Price Indices and Generational Inflation Gaps in South Korea

Abstract

This study constructs the first generationally disaggregated Consumer Price Index (CPI) for South Korea to examine age-specific inflation pressures. Using household expenditure data from the Korea Statistical Information Service, expenditure shares were derived for households headed by individuals under 50 (U50) and over 50 (O50), normalized, and applied to official CPI categories to build subgroup indices. Independent-samples t-tests revealed significant differences in budget allocation, with O50 households spending more on essentials and health, while U50 households allocated more to education and discretionary services. The resulting indices show that from 2022 to 2025, U50 households consistently experienced higher effective inflation, with the gap widening above three index points by 2024–2025. Decomposition of the aggregate gap highlights that food, health, and housing drove O50 burdens, whereas education, restaurants, and entertainment disproportionately affected U50 households. These findings demonstrate that aggregate CPI masks important generational disparities and underscore the need for policymakers to incorporate age-sensitive inflation measures.