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Perceived vs. observed inflation. Perceived inflation in connection with the euro adoption
Klubíčková, Kateřina ; Schwarz, Jiří (advisor) ; Martišková, Monika (referee)
This thesis deals with the difference between observed and perceived inflation. It builds on literature which focuses on perceived inflation and its difference from observed inflation. The thesis broadens existing literature with detailed analysis of factors affecting the difference between observed and perceived inflation (inflation gap) and its size. There are numerous theoretical explanations for the gap increase which followed the euro-changeover. This thesis summarizes these reasons and analyzes what and to what extent affects the size of the inflation gap using data about awareness about the euro among public, macroeconomic (GDP, rate of inflation, rate of unemployment etc.) and social variables (sex, age). Result of the analysis is that the size of the gap is affected particularly by the euro introduction. Extent of this impact differs for men and women, but is very similar across age groups. The impact of HICP and its components in various sectors was in most models larger in periods when countries were using euro as their national currency. Hypothesis stating that the higher is the awareness about the euro among public, the smaller is the inflation gap was confirmed in models considering later waves of the euro introduction.
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Perceived inflation in the Czech Republic
Kotmel, Benedikt ; Dózsa, Martin (advisor) ; Šopov, Daniel (referee)
This thesis deals with the difference between perceived and official inflation in the Czech Republic. Perceived inflation is topic mostly examined relatively to euro-changeover, because the gap between perceived and official inflation increases usually after euro- changeover. Some researches show that perceived inflation in the Czech Republic is significantly higher than the official inflation even if it is not part of the Eurozone. Euro acceptance could then cause even bigger inflation gap. Thesis examines used methods of measuring perceived inflation from the information value point of view and possibility to compare with official inflation measured by CPI. Further, this thesis summarizes examined causes of inflation gap and possible negative consequences of big inflation gap. Main part of the thesis is model examining influence of socio-economic and other selected variables on the perceived inflation. Finally, thesis compares the results with other EU countries and EU average. The results confirmed that some of the chosen variables (age, sex, financial situation of household etc.) have significant influence on gap between perceived and official inflation. Thesis also shows significant difference between perceived inflation measured by Balance statistics in the Czech Republic and EU average.
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Inflation targeting and inflation perceptions: an empirical analysis
Klubíčková, Kateřina ; Horváth, Roman (advisor) ; Janský, Petr (referee)
In this thesis we examine the effect of introduction of inflation targeting as a monetary policy regime on the difference between actual inflation and perceived inflation. Perceived inflation is used in the analysis in contrast with previous research, because inflation perceptions are extracted from consumer surveys conducted in individual European Union countries on the whole population sample and thereby enable us to examine the effect that the introduction of inflation targeting has across the whole population. A panel data set of 19 European Union members and 1 candidate, including 7 inflation targeters, is used in the analysis, with monthly information from the period beginning in January 1990 and ending in December 2012. Based on the analysis using fixed-effects model with specific dummy variables to capture the difference-in-differences element, we find that inflation targeters experience lower differences between actual and perceived inflation and that the difference between actual and perceived inflation decreases after the introduction of inflation targeting. Furthermore, various groups divided according to socio-economic characteristics of the consumer survey respondents tend to be affected in a different way by the introduction of inflation targeting, although to a limited extent. JEL...
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Perceived vs. observed inflation. Perceived inflation in connection with the euro adoption
Klubíčková, Kateřina ; Schwarz, Jiří (advisor) ; Martišková, Monika (referee)
This thesis deals with the difference between observed and perceived inflation. It builds on literature which focuses on perceived inflation and its difference from observed inflation. The thesis broadens existing literature with detailed analysis of factors affecting the difference between observed and perceived inflation (inflation gap) and its size. There are numerous theoretical explanations for the gap increase which followed the euro-changeover. This thesis summarizes these reasons and analyzes what and to what extent affects the size of the inflation gap using data about awareness about the euro among public, macroeconomic (GDP, rate of inflation, rate of unemployment etc.) and social variables (sex, age). Result of the analysis is that the size of the gap is affected particularly by the euro introduction. Extent of this impact differs for men and women, but is very similar across age groups. The impact of HICP and its components in various sectors was in most models larger in periods when countries were using euro as their national currency. Hypothesis stating that the higher is the awareness about the euro among public, the smaller is the inflation gap was confirmed in models considering later waves of the euro introduction.
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Znamená příjetí eura zdražování? Experimentální studie z České republiky
Bohumínský, Roman ; van Koten, Silvester (advisor) ; Zajíček, Miroslav (referee)
In the euro area, the changeover to the euro was accompanied by fears of increases in prices by consumers. However, in most countries the changeover had barely any effect on inflation indices, but a significant effect on perceived inflation and even now people still believe that the price increase was more dramatic than it was in reality. This paper examines the situation in the Czech Republic, being one of the last countries in the EU which have not adapted the euro yet. I am especially interested in finding whether a changeover would lead to price increases even though Czech citizens have got plenty of time to indirectly familiarize with the euro currency. The analysis is based on a laboratory experiment. With this method I am studying the effects of transition to euro on consumer behavior. In addition, I compare the results (indirectly) with those of other European countries. Under the framework of posted price experiment, it can be concluded that, in the particular sample, the changeover to euro currency does in fact affect the outcome of trade at least temporarily. In this case, the changeover from CZK to EUR leads to elevation of prices and reduction of the traded quantities, especially right after the changeover. The main reason for this is that the producers (sellers) tried to exploit the changeover situation in order to increase their profits. All the presented results are significant at 5% level.
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The Introduction of the Euro and Inflation: Cross-country Differences in Perceived Inflation
Svobodová, Lucie ; Klosová, Anna (advisor) ; Niu, Linlin (referee)
This dissertation thesis examines the divergence of perceived inflation, measured by the EU Consumer Surveys, and officially measured inflation after the introduction of cash euro in several eurozone countries. Two groups of countries are tested in the thesis -- countries accepting the euro in 2002 and countries providing the changeover in later years. The main goal of the thesis is to test cross-country differences between officially measured and perceived inflation with respect to economic, social and cultural specifics of the countries in the eurozone, while main focus is given to examining the differences between the above-mentioned two groups of countries. The results obtained could help to derive policy conclusions for the other EU countries which have not yet accepted the common currency.
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Price perception vs. measured inflation and its influence and impact on economics and political vote
Marková, Lenka ; Šíma, Josef (advisor) ; Rybáček, Václav (referee)
Measurement of price level with consumer price indices forms some gap between measured inflation and perceived inflation. The graduation theses is concerned with quantification of gap in particular group of individuals and shows on measuring data, how this gap influents individuals, if growth of cost of living according to consumer price index copies price perception. It illustrates influence the incorrect construction of indices as important orientation point in economy, which redistribution of recourses, in context with usage of indices for income indexation and suggests more appropriate approach for constructing aggregate price index. It investigates what factors influence price perception and comes into gain and loses calculation which people are confronted. Price perception is influenced both socio-economic and political environment. The end of theses overlaps into political vote and investigates if there is causal of relationship between price perception and political vote.
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Perceived Inflation - The New Phenomenon After The Euro Changeover
Smrčková, Gabriela ; Šaroch, Stanislav (advisor) ; Arlt, Josef (referee) ; Lacina, Lubor (referee) ; Čech, Zdeněk (referee)
The thesis focuses on theoretical and empirical analysis of the deterioration of price perception among European consumers after the introduction of the euro banknotes and coins. The aim of the thesis is to find out the major factors which provoked a rapid increase of the indicator of perceived inflation after 2002, while inflation in euro zone continued developing moderately, and to derive some conclusions for economic policy of candidate countries to euro introduction. There are at least four reasons why it matters to analyse the distortion of the indicator of perceived inflation from the HICP index which measures the inflation in the euro zone. Firstly, from the political and economical perspective there is a risk of weak support for the European monetary integration. Secondly, the distortion of price perception can deteriorate the belief in the official statistics. Thirdly, the inaccurate price perception can lead to wrong consumer decisions having an impact on a volume or a structure of national consumption. Last but not least, there is a risk of a negative impact on price expectations. In order to meet its goals, the thesis stases several hypotheses which analyse the problem from two perspectives. Firstly, from a mere review of detailed prices in the period of the introduction of the euro banknotes and coins (Hypotheses: (i) the consumers are more sensitive towards some price movements, therefore the deterioration of the indicator of perceived inflation can be explained by the abnormal evolution of some prices in the critical period of the euro introduction, (ii) convergence of the new euro prices towards round prices lead to frequent price movements having an impact on price perception) Secondly, from the point of view of limited perception of prices by consumers (Hypothesis: (iii) consumers does not behave rationally when deciding about prices therefore they are not able to perceive all price movements). The thesis is organized in three chapters. The first chapter is mainly theoretical and introduces the problem of perceived inflation. It is followed by two chapters which combine empirical and theoretical analysis of the drivers of perceived inflation after the euro introduction. Within its conclusions, the thesis identifies a combination of several factors that caused a rapid increase of the indicator of perceived inflation after the changeover which have their origins in a changed monetary environment. The effects coming from using rounded conversion rates instead of the official ones in mental conversions of the new euro prices to the old prices in national currencies, limited the possibility for consumers to perceive correctly the price movements. Moreover, higher sensitivity towards price increases in comparison to price decreases and a higher inflation in some areas led to blaming the new currency for high inflation. The irrational behaviour of consumers in relation to prices was strengthened by the effects of the new currency. The thesis also states that while the increase of the indicator of perceived inflation had no negative impact on inflation expectations, the deterioration of inflation perception might negatively influence consumption.
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