Low-income households in South Korea have borne a disproportionately heavier burden from rising prices. (Image courtesy of Yonhap)
SEOUL, April 3 (Korea Bizwire) — A decade-long analysis by the Korea Economic Research Institute (KERI) has revealed that low-income households in South Korea have borne a disproportionately heavier burden from rising prices, primarily due to steep increases in food and housing costs.
The study, released Wednesday, examined consumer-perceived inflation across income brackets from 2014 to 2024. It found that the lowest income group—the first quintile—experienced a perceived inflation rate of 23.2%, 2.6 percentage points higher than the highest income group, which reported a 20.6% increase.
The inflation burden showed a consistent downward trend with higher income levels: the second quintile recorded 22.4%, the third 21.7%, and the fourth 20.9%.
Food and housing costs, which consume a larger share of expenditures among low-income households, were the primary drivers of this disparity. As of 2024, households in the bottom income quintile spent 20.9% of their budget on food and non-alcoholic beverages, and another 20% on housing-related expenses such as rent, water, and heating.
Over the past decade, food prices surged by 41.9%—nearly double the overall inflation rate of 21.2%—while housing and utility costs rose by 17.5%.
In contrast, high-income households, which spend more on discretionary categories such as transportation, education, and leisure, experienced milder inflation in these sectors. From 2014 to 2024, prices in transportation rose just 5.3%, while education and cultural activities increased by 10.6% and 9.2%, respectively.
“The sharp rise in food prices over the past decade has intensified inflationary pressure on vulnerable households,” said Lee Sang-ho, head of KERI’s Economic and Industrial Policy Division. “To protect the economically disadvantaged, the government should stabilize agricultural supply chains, reform distribution regulations, and diversify import sources for key food items.”
As South Korea continues to grapple with inflation’s uneven impact, the findings underscore the need for targeted policy measures ahead of 2026, particularly in shielding low-income families from rising living costs.
Ashley Song (ashley@koreabizwire.com)
