What's Behind 'Inflation Perceptions'? A Survey-Based Analysis of Italian Consumers

41 Pages Posted: 15 Mar 2008  

Paolo Del Giovane

Bank of Italy

Silvia Fabiani

Bank of Italy

Roberto Sabbatini

Bank of Italy

Date Written: January 2008

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

JEL Classification: D12, E31

Suggested Citation

Del Giovane, Paolo and Fabiani, Silvia and Sabbatini, Roberto, What's Behind 'Inflation Perceptions'? A Survey-Based Analysis of Italian Consumers (January 2008). Bank of Italy Temi di Discussione (Working Paper) No. 655. Available at SSRN: https://ssrn.com/abstract=1105734 or http://dx.doi.org/10.2139/ssrn.1105734

Paolo Del Giovane (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Silvia Fabiani

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Roberto Sabbatini

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

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