Does inflation matter? The influence of perceived price changes on well-being

Łukasz Below

No 2023-086, KAE Working Papers from Warsaw School of Economics, Collegium of Economic Analysis

Abstract: I confirm the foregoing state of the art for inflation and well-being correlationwhile filling the gap in the literature and estimating the effects of individuals’ inflationperception on well-being. I also discover the significant heterogeneity in attitudestoward inflation, inflation perception, and unemployment among Europeancountries. Inflation measured by official statistics, as well as inflation perceived byconsumers, has a significant negative influence on people’s well-being. The relationwas confirmed by regressing reported life satisfaction on a wide set of individualcharacteristics, as well as macroeconomic variables. While the inflation perceptioninfluence on well-being in Eastern Europe is higher than the influence of HICP, forWestern Europe, it is the opposite. Both country groups also differ in terms of themarginal rate of substitution between inflation and unemployment – the effects ofhigher unemployment are more severe in comparison to the influence of inflation inWestern Europe.

Keywords: inflation; happiness; unemployment; well-being (search for similar items in EconPapers)
JEL-codes: D60 E31 E5 E7 I31 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2023-03
New Economics Papers: this item is included in nep-eec, nep-hap, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://hdl.handle.net/20.500.12182/1145 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sgh:kaewps:2023086

DOI: 10.33119/kaewps2023086

Access Statistics for this paper

More papers in KAE Working Papers from Warsaw School of Economics, Collegium of Economic Analysis Contact information at EDIRC.
Bibliographic data for series maintained by Dariusz Nojszewski ().