Gender differences in the perception of inflation

Abstract

Using data from Italy (1994–2018), we investigate gender differences in consumers’ inflation perceptions over time. We introduce a dynamic model in order to detect the changes in the shape of the probability distributions of judgments across time and to compare the behavior of the two groups of respondents. The model components describe the deep conviction of respondents about past inflation and the uncertainty generated by the intrinsic fuzziness surrounding the evaluation process. The results suggest that women tend to perceive a higher level of inflation than men, but this propensity has changed over the years. The Euro changeover and other economic events produced an increase in the heterogeneity of men’s responses and decreased the gap between the feelings of men and women about inflation. When the perceived inflation closely tracked the true rate, the gender difference was more pronounced because of the smaller heterogeneity and the higher asymmetry in the distribution of women’s judgments.