Study finds inflation hit rural households more severely

Thursday, Jul 21, 2022

New research has found that rural households have been more severely impacted by inflation than urban households, largely due to high fuel prices.

The Daily Yonder reports that rural households saw their disposable income fall by 38 percent between 2021 and 2022 while urban households saw a 17 percent drop, according to public data cited in the Iowa State University study.

Inflation has exacerbated the longstanding rural-urban divide, with rural households having far less disposable income after basic expenses are met. According to the study, fuel costs are the primary driver of rural inflation, especially because rural households tend to rely more on personal transportation than their urban counterparts.

“[Rural households] have to travel further for work, for school, for shopping, for daily needs, all that,” said David Peters, the study’s author. Peters noted that rural households lack access to public transportation and tend to prefer larger, less fuel-efficient, work-ready vehicles. The researcher noted that inflationary pressures on rural incomes have short- and long-term consequences, restricting families’ ability to pay for everything from retirement to college savings, healthcare, home improvement and auto maintenance.

“Not having this extra financial cushion puts rural families at greater risk for increased debt, default, and potential bankruptcy,” Peters said.