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Partisan Bias in Inflation Beliefs: New Evidence from Korea

Author

Listed:
  • Sangyup Choi

    (Yonsei University)

  • Sang-Hyun Kim

    (Yonsei University)

  • Myunghwan Andrew Lee

    (New York University)

  • Siye Bae

    (Yonsei University)

  • Myungkyu Shim

    (Yonsei University)

Abstract

Does partisanship affect household inflation beliefs? This paper answers this question using new online survey data of South Korea, which was run between the presidential election in March 2022 and the presidential inauguration in May 2022, during which participants experienced a regime change. We find that (1) partisan bias affects both inflation expectations and perceived inflation in the past year but (2) self-reported financial literacy mitigates the bias.

Suggested Citation

  • Sangyup Choi & Sang-Hyun Kim & Myunghwan Andrew Lee & Siye Bae & Myungkyu Shim, 2022. "Partisan Bias in Inflation Beliefs: New Evidence from Korea," Working papers 2022rwp-205, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2022rwp-205
    as

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    References listed on IDEAS

    as
    1. Robbett, Andrea & Matthews, Peter Hans, 2018. "Partisan bias and expressive voting," Journal of Public Economics, Elsevier, vol. 157(C), pages 107-120.
    2. Easaw, Joshy & Golinelli, Roberto & Malgarini, Marco, 2013. "What determines households inflation expectations? Theory and evidence from a household survey," European Economic Review, Elsevier, vol. 61(C), pages 1-13.
    3. Abildgren, Kim & Kuchler, Andreas, 2021. "Revisiting the inflation perception conundrum," Journal of Macroeconomics, Elsevier, vol. 67(C).
    4. Oliver Bachmann & Klaus Gründler & Niklas Potrafke & Ruben Seiberlich, 2021. "Partisan bias in inflation expectations," Public Choice, Springer, vol. 186(3), pages 513-536, March.
    5. Alan S. Gerber & Gregory A. Huber, 2010. "Partisanship, Political Control, and Economic Assessments," American Journal of Political Science, John Wiley & Sons, vol. 54(1), pages 153-173, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation expectations; partisan bias; household survey; Blinder-Oaxaca decomposition.;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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