What’s behind “inflation perceptions”? A survey-based analysis of Italian consumers

Paolo Del Giovane (), Silvia Fabiani () and Roberto Sabbatini ()
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Paolo Del Giovane: Banca d'Italia
Silvia Fabiani: Banca d'Italia
Roberto Sabbatini: Banca d'Italia

No 655, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research Department

Abstract: This study investigates inflation perceptions in both qualitative and quantitative terms and their relationship with factors likely to affect them. This has been done in a unified framework through a survey of a representative sample of Italian consumers carried out at the end of 2006. The results show that reported inflation is, on average, much higher than measured by official statistics. Inflation perceptions are higher for women, the unemployed and less educated individuals, as well as for consumers with some forms of financial distress. A very low knowledge of the inflation concept and related statistics and an inaccurate memory of past prices turn out to play a significant role in explaining the highest class of perceptions. In contrast, the characteristics of individual shopping activity do not result to be significant. All in all, these results suggest that when consumers express their opinions on what they report as “inflation”, they are incorporating a complex combination of forces that go well beyond the phenomena measured by official inflation statistics.

Keywords: inflation; consumers; perceptions; euro (search for similar items in EconPapers)
JEL-codes: D12 E31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Date: Written 2008-01

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