The Misperception of Inflation by Irish Consumers
AbstractPerceptions and forecasts of inflation have the potential to impact on a range of economic outcomes. We reveal large, systematic overestimation of inflation by Irish consumers, which varies by social group. In contrast to previous work in this area, our models suggest the upward bias and the variation by social group should be considered substantially separate phenomena. We also offer evidence that inflation misperceptions are linked to attitudes and intentions with respect to consumption and saving and, hence, are likely to affect household decision-making. The findings therefore raise issues regarding the relationship between financial literacy and consumer behaviour.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Economic and Social Studies in its journal Economic and Social Review.
Volume (Year): 40 (2009)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.esr.ie
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jonung, L. & Laidler, D., 1988.
"Are Perceptions Of Inflation Rational? Some Evidence For Sweden,"
UWO Department of Economics Working Papers
8808, University of Western Ontario, Department of Economics.
- Jonung, Lars & Laidler, David E, 1988. "Are Perceptions of Inflation Rational? Some Evidence for Sweden," American Economic Review, American Economic Association, vol. 78(5), pages 1080-87, December.
- Stix, Helmut & Fluch, Manfred, 2007. "The Development of Euro Prices – Subjective Perception and Empirical Facts," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 55â84.
- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-91, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Bates, John M. & Gabor, Andre, 1986. "Price perception in creeping inflation: Report on an enquiry," Journal of Economic Psychology, Elsevier, vol. 7(3), pages 291-314, September.
- CÃ©line Christensen & Peter van Els & Maarten van Rooij, 2006.
"Dutch households' perceptions of economic growth and inflation,"
DNB Working Papers
093, Netherlands Central Bank, Research Department.
- Céline Christensen & Peter Els & Maarten Rooij, 2006. "Dutch Households’ Perceptions of Economic Growth and Inflation," De Economist, Springer, vol. 154(2), pages 277-294, June.
- Ranyard, Rob & Missier, Fabio Del & Bonini, Nicolao & Duxbury, Darren & Summers, Barbara, 2008. "Perceptions and expectations of price changes and inflation: A review and conceptual framework," Journal of Economic Psychology, Elsevier, vol. 29(4), pages 378-400, August.
- Lloyd B. Thomas, 1999. "Survey Measures of Expected U.S. Inflation," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 125-144, Fall.
- Seán Lyons & Karen Mayor & Richard S.J. Tol, 2008. "Environmental Accounts for the Republic of Ireland: 1990-2005," Papers WP223, Economic and Social Research Institute (ESRI).
- Kemp, Simon, 1987. "Estimation of past prices," Journal of Economic Psychology, Elsevier, vol. 8(2), pages 181-189, June.
- Frances Ruane & Xiaoheng Zhang, 2007. "Location Choices of the Pharmaceutical Industry in Europe after 1992," The Institute for International Integration Studies Discussion Paper Series iiisdp220, IIIS.
- Marco Malgarini, 2009. "Quantitative Inflation Perceptions and Expectations of Italian Consumers," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 68(1), pages 53-80, April.
- Jonung, Lars, 1981. "Perceived and Expected Rates of Inflation in Sweden," American Economic Review, American Economic Association, vol. 71(5), pages 961-68, December.
- Bj�rn D�hring & Aurora Mordonu, 2007. "What drives inflation perceptions? A dynamic panel data analysis," European Economy - Economic Papers 284, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Brachinger, Hans Wolfgang, 2008. "A new index of perceived inflation: Assumptions, method, and application to Germany," Journal of Economic Psychology, Elsevier, vol. 29(4), pages 433-457, August.
- Lunn, Pete & Duffy, David, 2010. "The Euro Through the Looking-Glass: Perceived Inflation Following the 2002 Currency Changeover," Papers WP338, Economic and Social Research Institute (ESRI).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Frank Walsh).
If references are entirely missing, you can add them using this form.