Journal of Consumer Policy

, Volume 30, Issue 4, pp 405–419

The Euro Changeover and the Factors Influencing Perceived Inflation

Authors

    • Institute of Psychology and ErgonomicsTechnical University of Berlin
  • Hans Wolfgang Brachinger
    • Department of Quantitative EconomicsUniversity of Fribourg
  • Julia Belting
    • Institute of Psychology and ErgonomicsTechnical University of Berlin
  • Katarzyna Grinberg
    • Department of Quantitative EconomicsUniversity of Fribourg
  • Elisabeth Zacharias
    • Institute of Psychology and ErgonomicsTechnical University of Berlin
Original Paper

DOI: 10.1007/s10603-007-9051-4

Cite this article as:
Jungermann, H., Brachinger, H.W., Belting, J. et al. J Consum Policy (2007) 30: 405. doi:10.1007/s10603-007-9051-4

Abstract

The most flamboyant economic effect of the euro changeover on consumers was a dramatic increase in perceived inflation. To directly measure perceived inflation, Brachinger developed a new index of perceived inflation (IPI). This index is based on some hypotheses about factors influencing perceived inflation. An experimental study is presented which investigated the influence of two of these hypothesized factors, purchase frequency and loss aversion, on individual judgments of price changes. Furthermore, two additional factors have been included that are informative with respect to the IPI, product segment and price level. Judgments of inflation were assessed with three methods, yielding different results. Empirical evidence for the hypotheses was obtained.

Keywords

Perceived inflationIndex of perceived inflation (IPI)Loss aversionPurchase frequency

JEL classification

C43E31D81

Copyright information

© Springer Science+Business Media, LLC. 2007