The continuous rise in prices of goods and services has generated debate and concern among consumers. Products such as the donut, which two decades ago cost around 0.35 euros and is now sold for 2 euros, and coffee, whose price has also increased significantly, create the feeling that the cost of living is growing faster than the Consumer Price Index indicates.
The root of this discrepancy does not lie in data manipulation by the National Statistics Institute, but rather in the nature of the CPI itself, which does not measure the particular cost of living increase for each individual. The index calculates a broad and weighted basket of goods and services, without specifically focusing on items such as donuts, coffees or rent that each person faces. Since 2020, food prices have increased significantly more compared to other categories, while sectors such as information and communications have become more affordable.
Between January 2020 and January 2026, prices for food and non-alcoholic beverages rose 38.5%, while restaurant and accommodation services increased 28.4%. During the same period, the information and communications category fell 2.3%. Purchase frequency plays a fundamental role in the perception of inflation, as products such as coffee, bread and milk are bought regularly and any increase is quickly noticed. Additionally, geographical, income and consumption habit differences influence how inflation is perceived by each person.
The way housing is treated in price indices also contributes to this perception difference. While rent enters the CPI, the purchase of a house is not considered a consumption expense, being classified as an asset. Thus, for those trying to enter the housing market, the inflation experience may differ considerably from that of someone who already owns their home. The CPI serves well to understand how overall prices are evolving, but may not offer a complete picture of the specific impact on each family's life.
