economistsinmaking618-boop/nigeria-hidden-inflation-poverty-cpi

Poverty-Weighted CPI analysis revealing Nigeria's official inflation figures understate price pressure on the bottom 40% of households (2015–2024). # Nigeria's Hidden Inflation: How Official CPI Undercounts Poor Household Inflation (2015–2024) A Poverty-Weighted CPI analysis showing that Nigeria's official inflation figures systematically understate the price pressure experienced by the bottom 40% of households. ## Overview Nigeria's official Consumer Price Index (CPI) is built from average household spending patterns. But a middle-class household in Lagos and a subsistence farmer in Zamfara spend very differently — and a CPI that averages both accurately represents neither. This project constructs an alternative measure, the **Poverty-Weighted CPI**, using actual expenditure shares of the bottom 40% of Nigerian households, and compares it against the official CPI from January 2015 to September 2024 (117 months). ## Key Findings - **53.4%** — share of income poor households spend on food - **40.0%** — food weight used in the official CPI basket - **13.4pp** — the resulting "hidden gap" - Poor Nigerians experienced **higher inflation than the official figure in 74 of 117 months (63%)** between 2015 and 2024 ## Data & Methodology | Dataset | Source | Coverage | Purpose | |---|---|---|---| | NLSS 2018/19 Household Survey | World Bank / NBS | 22,111 households | Poverty weight extraction | | CBN Monthly CPI by Division | CBN Statistical Bulletin | Jan 2010 – Sep 2024 | Monthly price indices | | NBS CPI Headline Series | NBS / CBN | Jan 2003 – Apr 2026 | Food & core inflation rates | | NBS CPI Rebasing Highlights | NBS | 2024 base year | Official weight comparison | **Poverty weight extraction:** All 22,111 NLSS households were ranked by per-capita consumption and split into quintiles, with survey weights applied for national representativeness. The bottom 40% showed a 53.4% food expenditure share, versus 45.3% for all households and 38.7% for the top 40%. **Poverty-CPI formula:** ``` Poverty CPIₜ = (0.534 × Food Inflationₜ) + (0.466 × Core Inflationₜ) Inflation Gap = Poverty CPI − Official CPI ``` A pos …