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

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  • Bernd Hayo

    (University of Marburg)

  • Florian Neumeier

    (Ifo Institute–Leibniz Institute for Economic Research at the University of Munich)

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.

Suggested Citation

  • Bernd Hayo & Florian Neumeier, 2018. "Households’ Inflation Perceptions and Expectations: Survey Evidence from New Zealand," MAGKS Papers on Economics 201805, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:201805
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    Cited by:

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    3. Chee-Hong Law & Kim Huat Goh, 2024. "A systematic literature review of the implications of media on inflation expectations," International Economics and Economic Policy, Springer, vol. 21(2), pages 311-340, May.
    4. Hayo, Bernd, 2023. "Does the ECB's monetary policy affect personal finances and economic inequality? A household perspective from Germany," Economic Modelling, Elsevier, vol. 129(C).
    5. Hayo, Bernd & Neumeier, Florian, 2020. "Public knowledge about and attitudes towards central bank independence in New Zealand," Journal of Banking & Finance, Elsevier, vol. 113(C).
    6. Şule GÜNDÜZ & Seçkin YILDIRIM & Mübeccel Banu DURUKAN, 2020. "An Investigation of the Factors Affecting Inflation Perceptions: A Case Study on Business and Economics Undergraduate Students Abstract: The aim of this study is to investigate the factors behind the ," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(45).
    7. Tim Friehe & Christian Pfeifer, 2024. "Predicting satisfaction with democracy in Germany using local economic conditions, social capital, and individual characteristics," Economics of Governance, Springer, vol. 25(3), pages 335-377, September.

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    More about this item

    Keywords

    Inflation perception; inflation expectation; New Zealand; monetary policy; household survey;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • Z1 - Other Special Topics - - Cultural Economics

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