Households’ Inflation Perceptions and Expectations: Survey Evidence From New Zealand

MAGKS Joint Discussion Paper No. 05-2018

40 Pages Posted: 27 Jun 2018

See all articles by Bernd Hayo

Bernd Hayo

University of Marburg - School of Business & Economics

Florian Neumeier

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: February 2, 2018

Abstract

In this paper, we study how inflation is viewed by the general population of New Zealand. Based on unique representative survey data collected in 2016 and using descriptive statistics and multivariate regressions, we explore various aspects of how laypersons perceive inflation and form inflation expectations. We focus on how an individual’s economic situation, information search and interest in inflation, economic knowledge, and attitudes and values are related to inflation perception and expectation, as well as the individual’s reaction to them. We interpret our findings as a clear indication that laypersons’ knowledge about inflation is much better described by the imperfect information view prevailing in social psychology than by the rational actor view typically assumed in economics.

Keywords: Inflation Perception, Inflation Expectation, New Zealand, Monetary Policy, Household Survey

JEL Classification: E52, E58, Z1

Suggested Citation

Hayo, Bernd and Neumeier, Florian, Households’ Inflation Perceptions and Expectations: Survey Evidence From New Zealand (February 2, 2018). MAGKS Joint Discussion Paper No. 05-2018 . Available at SSRN: https://ssrn.com/abstract=3199690 or http://dx.doi.org/10.2139/ssrn.3199690

Bernd Hayo (Contact Author)

University of Marburg - School of Business & Economics ( email )

Universitaetsstr. 24
Marburg, D-35032
Germany
++49(0)6421-28-23091 (Phone)
++49(0)6421-28-23193 (Fax)

Florian Neumeier

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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