| Abstract |
Recent concerns over the divergence between official inflation indices and consumers' perceived
inflation highlight the need to better capture their lived economic experiences. Particularly for
food, which are both frequently purchased and essential to human beings daily lives, the gap
between its perceived and official inflation can undermine public trust for the government’s price
stabilization and distort inflation expectations. This study develops a shopping basket-based perceived
inflation index by leveraging cross-sectional survey data from 2021 to 2023 and examines how
the perceived inflation influences dietary satisfaction across different demographic groups. A
combination of probability, balance statistics, and median approaches was employed to robustly
estimate perceived inflation levels, while generalized least squares (GLS) regression was applied
to analyze factors affecting dietary satisfaction. The findings indicate that consumers consistently
perceived food inflation to be higher than the official figures, with this gap widening during periods
of high inflation. Furthermore, the perceived inflation gap was significantly associated with lower
dietary satisfaction, particularly among elderly and low-income households. These results suggest
that inflation perceptions are not merely reflections of economic indicators but also meaningful
determinants of subjective well-being. The study underscores the importance of incorporating
consumer-perceived inflation into policy design, particularly in food security and welfare programs.
|
