What's Happening?
Zach Morris, PhD, an associate professor at Stony Brook University's School of Social Welfare, has been awarded a grant from the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation. The grant will fund the development of a replicable
consumer price index specifically for people with disabilities (CPI-D). This research builds on Dr. Morris's previous work, also supported by a FINRA Foundation grant, which provided the first national estimates of the extra costs associated with living with a disability, calculated at an additional $18,322 per year for a household at the median income level. People with disabilities often incur extra expenses for assistive technologies, transportation, and medical care, leading to different spending patterns and inflation experiences compared to the general population. Dr. Morris will collaborate with Stephanie Rennane, PhD, a senior economist from the RAND Corporation, on this project. Their prior research indicated that medical expenses constitute approximately 15 percent of expenditures for disability benefit recipients, compared to 7 percent for the average consumer.
Why It's Important?
The development of a CPI-D is critically important because it will provide a much-needed measure of inflation tailored to the unique consumer experiences of the more than 61 million Americans living with a disability. Current consumer price indices may not accurately reflect the financial realities faced by this population, as their spending baskets differ significantly due to disability-related costs. An accurate CPI-D can empower people with disabilities to make more informed financial decisions and plan for their futures more effectively. Furthermore, this index will be invaluable for policymakers, enabling them to ensure that crucial programs like Social Security Disability Insurance and Supplemental Security Income are accurately indexed to the actual inflation experiences of their beneficiaries. This could lead to more equitable and effective social safety nets, preventing the erosion of purchasing power for a vulnerable segment of the population and addressing a long-standing gap in economic data.
What's Next?
Dr. Morris and Dr. Rennane will proceed with developing the CPI-D, focusing on creating a replicable methodology that can be consistently applied. The research will involve detailed analysis of spending patterns and cost drivers specific to individuals with disabilities, taking into account expenses such as assistive technologies, specialized transportation, and higher medical costs. The goal is to produce a robust index that accurately reflects the inflation experienced by this demographic. Once developed, the CPI-D could be used by financial advisors, disability advocates, and government agencies to better understand and address the economic challenges faced by people with disabilities. Its existence could also spur further research into the economic well-being of disabled individuals and potentially influence policy debates around disability benefits, healthcare costs, and financial inclusion.
Beyond the Headlines
This initiative highlights a broader movement towards disaggregated economic data and the recognition that 'average' economic indicators often mask significant disparities within the population. The creation of a CPI-D underscores the concept of 'disability tax'—the hidden and often substantial costs associated with living with a disability that are not accounted for in standard economic models. By quantifying these unique inflationary pressures, the project brings to light systemic economic inequalities and the need for more nuanced policy responses. It also emphasizes the importance of interdisciplinary collaboration, combining social welfare research with economic analysis to address complex societal challenges. The long-term implications could extend beyond financial planning and benefit indexing, potentially influencing product development, service provision, and advocacy efforts aimed at reducing the financial burden on people with disabilities, thereby promoting greater economic equity and inclusion.
