Inflation illiteracy - a micro-data analysis

• Using micro-level survey data from the National Institute of EconomicResearch’s Economic Tendency Survey, we find that a relatively largeshare of Swedish households is ill-informed about the rate of inflation inthe economy, with perceived and expected rates of inflation deviatingsubstantially from official measures. Probit analysis of the data indicatesthat such inflation illiteracy is related to respondent characteristics,including income, education and sex. Finally, we show that the treatmentof extreme-value answers has a substantial effect on the aggregated timeseries typically reported and discussed.

• Survey data Economic Tendency Survey Swedish households' perceptions of the current rate of inflation and their expectations of the future rate of inflation. They analyse what percentage of households can be considered to be poorly informed about inflation (as their responses devia on te significantly from the historical pattern of inflation), and what characterises these households

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Keyword

inflation expectations

survey data

inflation illiteracy

Publication and Content Type

art (subject category)

vet (subject category)