LITTLE ROCK, Ark. — Recently, Arkansas Sen. John Boozman’s office issued a news release that touched on the struggles for families throughout the state due to the 40-year high inflation rates.
The senator's office highlighted a potentially large number, as the press release claimed that “inflation cost Arkansans $452 in April.”
The senator’s office based this off data analysis collected by the Joint Economic Committee, comparing much more today's average household is paying to maintain the same standard of living compared to January 2021.
So, is it true that Arkansas families are actually paying $452 more a month because of inflation? Well, let's Verify.
Our sources: Jeremy Horpedahl, Associate Professor of Economics at University of Central Arkansas and Michael Pakko, Chief Economist and State Economic Forecaster with the Arkansas Economic Development Institute.
While the number seems a tad bit higher than what they're projecting, Horpedahl said that it's not too far off.
“I would say that number is a little bit high, but pretty close,” Horpedahl said.
He said that the projected number is about $52 lower per month for Arkansas families, but that the original $452 is not far off.
“[The] median household income in Arkansas is around $49,000, or about $4,000 per month. If the family spent all their income on goods and services, that would mean $400 per month more in costs of those items. Of course, some of their income goes to taxes, some goes to saving,” Horpedahl said.
As for Michael Pakko, he agrees with the $452 figure and said that he even ran his own calculations to verify.
“I went through and checked the accuracy of the statistics. I was even able to replicate the calculations and it’s absolutely accurate,” he said.
Pakko said that $452 mark is based off what experts are expecting the average household to pay alongside the average price of items that they expect them to purchase.
“So in this case what they’re really doing is making a comparison between April of 2022 and January of 2021, and calculating how much prices have increased over that time,” Pakko said. “Now the way they come up with an actual number – that $452 – is to base it off of what they calculate as the average spending for a month for a household."
The tricky part in this is that each Arkansan consumes a different amount of goods, which could cause variations in numbers.
"The whole idea is to measure how much the entire cost of living has changed for a typical household, and of course there are different patterns of spending for different households, especially as income levels change,” Pakko said.
So, is it true Arkansas families are really paying $452 more a month because of inflation?
According to our experts, this is an accurate estimate. In fact, in our area –considered the West South Central Region – inflation has been running a bit higher than the rest of the country according to Pakko.
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