Ames, Iowa — An Iowa State University study shows inflation is hitting rural residents harder that those in urban areas.
Professor David Peters, a rural sociologist for ISU Extension and Outreach, says inflation took a bigger bite off rural household budgets throughout much of last year, but its effects were similar in rural and urban areas by year’s end.
That discretionary income is critical, he says, for handling unexpected or emergency expenses. In the past two years, Peters says inflation has cost the average rural household a total of more than eight-thousand dollars.
Peters says he doesn’t foresee inflation letting up anytime soon.
The Federal Reserve recently raised interest rates to stave off further inflation, which Peters says raises the risk of the economy falling into a recession.
Peters says rural households paid an extra 300 dollars per month because of inflation in 2021, but the urban-rural gap in additional expenses was modest, around 15 dollars a month. When transportation costs shot up in early 2022, largely due to higher gas prices, he says rural households felt it more. For the first two-thirds of the year, inflation cost rural households at least an extra 450 dollars per month, which is 60 to 90 dollars more than urban households. You can see the full report online at https://smalltowns.soc.iastate.edu/wp-content/uploads/sites/163/2023/02/SOC-3106.pdf.
