Yesterday the latest inflation rates for Germany were published. Basic goods cost, on average, 6.4 per cent more in June 2023 than in June 2022.
But people believe that the inflation rate is significantly higher. According to a study, the inflation perceived by consumers in Germany is almost three times as high as the inflation rate actually determined. They think it is 18 per cent.
Where does the discrepancy between reality and one’s perception come from?
People tend to focus on particularly significant cases of price increases. Conversely, stable or falling prices tend not to be noticed. This creates a distorted picture and a strong discrepancy between perceived and actual inflation.
This strong perception of negative developments is part of human nature. It’s in our genes. We pay great attention to bad news because that has ensured our survival for thousands of years.
Nutshell in a nutshell: People tend to overestimate negative developments. This also applies in times of inflation. In Germany, for example, the inflation perceived by consumers is almost three times as high as the inflation rate actually determined.
Pixelökonom 