A special IDI survey found that Israelis say that while there has been an 8.5% rise in their expenses over the past year, wages have remained stagnant – and even declined. The public is also split on which type of government after November’s election would deal best with the high cost of living.
The cost of living in Israel compared with other Western countries
Though this finding represents a subjective impression directly influenced by media discourse, which itself is often biased, the overwhelming majority of respondents (85%) believe that living costs in Israel are expensive relative to most Western countries. This finding is in line with the OECD’s comparative price level indices Comparative price level indices are the ratios of purchasing power parities to market exchange rates. At the level of GDP, comparative price levels provide a measure of the differences in the general price levels of countries. This indicator is measured as an index. https://data.oecd.org/price/price-level-indices.htm., according to which only two countries are more expensive than Israel (Iceland and Switzerland). There is broad agreement on this issue among both Jews and Arabs, among voters for different parties, among older and younger age groups, and among those whose income is above and below average.
Cost of living in Israel relative to other Western countries (total sample; %)
Which expense is the most burdensome?
We have seen that economic issues are set to play a key role in the upcoming elections. Thus, we dedicated a section of this month’s survey to examining the subject of the high cost of living in Israel. We asked the respondents which expense represents the greatest burden on their family or individual budget. Food and housing emerged as the most burdensome categories (around one-quarter of respondents cited each of these two expenses). Behind them were ranked energy and taxation costs (15.5% and 13%, respectively), and at the bottom of the list, expenditure on childcare (6%), medical services (4%), tuition (3%), and transport (3%).
Which of the following expense categories represents the greatest burden on your family or individual budget? (total sample; %)
Differences between Jews and Arabs emerged mainly with regard to housing: 29% of Jews cited housing as their most burdensome expense, compared with just 10% of Arabs. Among Arab respondents, the leading two expense categories selected were energy (27%) and food (25%).
A breakdown of responses by income reveals that respondents who reported above-average incomes stated that the most burdensome expense is housing (29%), followed by taxation (20%), while those with average incomes cited housing and food (29% each), with taxation lagging far behind (11%). Respondents with below-average incomes reported food expenses as the most burdensome (28%), followed by housing (22%), with taxation once again ranked much lower (9%).
Breaking down Jewish respondents by age, we find that housing and food are the most burdensome expenses in each age group. However, several differences emerge between the different groups: Housing is the most burdensome expense for groups up to 44, but above this age, the share of those who cite it declines steadily. Food is the most burdensome expense for the over-45s, but places second among younger age groups. Only a small proportion reported medical services as the most burdensome expense in the age groups under 65, but it was cited by 17% of those aged 65 and above. Childcare features as a fairly burdensome expense among those aged 25–44 (10%), compared with tiny proportions of the other age groups. A breakdown of respondents according to whether or not they have children aged 0–3 finds that almost a fifth (19%) of parents to children in this age group stated that childcare is their most burdensome expense.
Most burdensome expense, by age group (Jews; %)
A breakdown of the responses to the question about the expense category that represents the greatest burden reveals that half of those who live in rental properties define housing as the most burdensome expense out of those presented. Housing expenses were cited as the most burdensome by more than a quarter of respondents who live in a property they own with a mortgage, and by a relatively low share (8%–17%) of those living in a property with no mortgage attached.
Housing as the most burdensome expense (total sample, by housing status; %)
Change in expenses over the last year
We wanted to know about changes in expenses in various categories over the last year, as experienced by the respondents. The respondents report an 8.5% rise in their outgoings. According to their responses, the expense category with the largest increase has been food (up by 12.4% over the last year). Immediately behind food come energy expenses, which rose on average by 11.4%.
The cost of transport was also identified by respondents as having undergone a relatively large increase over the last year, of 8.8%. The average increase in childcare costs for small children reported by respondents was also 8.8%.
Another category that has featured strongly in media discourse is the cost of housing. The respondents estimated on average that their expenses in this area rose by 7% over the last year. A breakdown of responses by housing status reveals that while those living in rental property said that their housing expenses increased by 8.3% on average over the last year, other respondents reported a smaller rise (6.3% for those living in their own property, with or without a mortgage).
The expense category in which the respondents reported the smallest increase was medical services, with an average of 5.3%.
Average rise in family expenses in various categories as reported by respondents (total sample; %)
In summary, the findings show that the respondents feel their outgoings have risen across all categories, and that the increases they report in some categories are greater than those shown in CBS data, by up to twice as much.
Furthermore, in all the categories we examined, Arab respondents report a greater increase in their expenses over the last year than Jewish respondents, with the average increase reported by Jews being 8.1%, and by Arabs, 10.3%.
And what has happened to income over the last year?
After looking at the increases in respondents’ expenses over the last year, we asked whether there had been an accompanying change in their income (net, after tax and including benefit payments). We found that for most (55%), their income has not changed, while a quarter said that it has fallen, and only 15% that their income has risen. These findings may help explain the sense of a sharp increase in expenses reported by the respondents.
Based on the respondents’ reporting, it is noticeable that social inequalities have grown over the last year: One-third of Arab respondents stated that their income has fallen over the last year, and only 10% that it has risen, compared with less than a quarter of Jews who said that their income has decreased and 16.5% who said that it has increased. Among the Jewish public as well, we found differences according to monthly income: Around a third of Jews whose income is below average reported that their income declined in the last year, compared with just 15% of those with above-average incomes.
Change in income over the last year (% of respondents)
|By income, Jews||Below average||32.5||52||11|
Which government will best address the high cost of living?
It appears that there is no majority opinion on this question: The most common response (27%) was that there is no difference between the possible governments, while 21% stated that a broad national unity government would do the best job of addressing the problem of the high cost of living in Israel. Another 21% identified a right-wing and Haredi government as the best option in this regard, and 16% opted for a center-left government.
Which government will best address the problem of the high cost of living? (total sample; %)
A breakdown of the Jewish sample by political orientation reveals that 35% of those on the Right think that a right-wing and Haredi government will best address this problem, and only 3% a center-left government. On the Left, the situation is reversed: 57% hold that a center-left government will best deal with the problem of the high cost of living, and only 5% that a right-wing and Haredi government would do better. A similar picture holds true in the Center, albeit to a more modest degree (28% preferring a center-left government on this issue, and 5%, a right-wing and Haredi government).
Which government will best address the problem of the high cost of living? (Jews; %)
The July 2022 Israeli Voice Index was prepared by the Viterbi Family Center for Public Opinion and Policy Research at the Israel Democracy Institute. The survey was conducted via the internet and by telephone (to include groups that are under-represented on the internet) between July 25 and July 27, 2022, with 600 men and women interviewed in Hebrew and 150 in Arabic, constituting a nationally representative sample of the adult population in Israel aged 18 and over. The maximum sampling error was ±3.59% at a confidence level of 95%. Field work was carried out by Midgam Research and Consulting Ltd. The full data file can be found at: Data Israel.