We often say that low income families are hit harder by rises in the prices of necessities than high income families. That is very topical with the big rises in food prices in the last year – 7.5 percent from June 2010 to June 2011 – and petrol up 20.1 percent between the two June quarters. Why should they be hit differently? Because for low income people, a bigger proportion of their spending goes on necessities, and they spend a greater proportion of their income. People with higher incomes have more income over which they have greater choice. That could include saving, and spending on luxury items such as travel, dining out, and additional or more expensive cars and houses. How much different are these patterns of expenditure and what difference do they make?