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Examining the determinants of consumer perception of inflation

Author

Listed:
  • Ghita Regasse

    (Ibn Haldun University)

  • Muhittin Kaplan

    (Ibn Haldun University)

Abstract

This study investigates the determinants of consumer inflation perception in 2023 using survey data from households in Morocco, Türkiye, and Italy. By integrating psychological variables such as media influence, peer influence, memory, and past inflation perceptions with socio-demographic factors (age, gender, education, professional status, and living standards), this paper offers a multidimensional view of how inflation is perceived. Using both multiple regression and ordered probit models, the analysis reveals common predictors—education, income level, inflation knowledge, and media exposure—while also identifying distinct country-specific patterns. In Türkiye, peer and media influence are dominant; in Morocco, consumer sentiment and memory play a stronger role; in Italy, media and memory are most influential. This study contributes to the literature by being among the first to systematically compare inflation perception determinants across countries using both socioeconomic and psychological variables. It demonstrates that inflation perception is not only an economic reaction but also a socially and cognitively embedded phenomenon, shaped by contextual and cultural differences. The findings offer important implications for inflation communication strategies: policymakers should tailor media messaging, financial education, and peer-led interventions to improve public understanding and trust in monetary policy.

Suggested Citation

  • Ghita Regasse & Muhittin Kaplan, 2025. "Examining the determinants of consumer perception of inflation," SN Business & Economics, Springer, vol. 5(6), pages 1-32, June.
    • Handle: RePEc:spr:snbeco:v:5:y:2025:i:6:d:10.1007_s43546-025-00823-w
    DOI: 10.1007/s43546-025-00823-w
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    References listed on IDEAS

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    5. Fischer, Charles C., 1986. "The differential impact of inflation on key societal interest groups and public policy implications," Journal of Economic Psychology, Elsevier, vol. 7(3), pages 371-386, September.
    6. Gärling, Tommy & Gamble, Amelie & Christandl, Fabian, 2013. "Income increases do not compensate for perceived inflation—A price-consumption anomaly," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 11-15.
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