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What�s behind �inflation perceptions�? A survey-based analysis of Italian consumers

Author

Listed:
  • Paolo Del Giovane

    (Banca d'Italia)

  • Silvia Fabiani

    (Banca d'Italia)

  • Roberto Sabbatini

    (Banca d'Italia)

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.

Suggested Citation

  • Paolo Del Giovane & Silvia Fabiani & Roberto Sabbatini, 2008. "What�s behind �inflation perceptions�? A survey-based analysis of Italian consumers," Temi di discussione (Economic working papers) 655, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_655_08
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    References listed on IDEAS

    as
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    Cited by:

    1. Nikoleta Anesti & Vania Esady & Matthew Naylor, 2024. "Food prices matter most: Sensitive household inflation expectations," Discussion Papers 2434, Centre for Macroeconomics (CFM).

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    More about this item

    Keywords

    inflation; consumers; perceptions; euro;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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