Template-Type: ReDIF-Paper 1.0 
Title: Does inflation matter? The influence of perceived price changes on well-being
Author-Name: Łukasz Below 
Abstract: I confirm the foregoing state of the art for inflation and well-being correlationwhile filling the gap in the literature and estimating the effects of individuals’ inflationperception on well-being. I also discover the significant heterogeneity in attitudestoward inflation, inflation perception, and unemployment among Europeancountries. Inflation measured by official statistics, as well as inflation perceived byconsumers, has a significant negative influence on people’s well-being. The relationwas confirmed by regressing reported life satisfaction on a wide set of individualcharacteristics, as well as macroeconomic variables. While the inflation perceptioninfluence on well-being in Eastern Europe is higher than the influence of HICP, forWestern Europe, it is the opposite. Both country groups also differ in terms of themarginal rate of substitution between inflation and unemployment – the effects ofhigher unemployment are more severe in comparison to the influence of inflation inWestern Europe.
Number: 2023-086
Length: 31 pages 
Creation-Date: 2023-03
Keywords: inflation, happiness, unemployment, well-being
Classification-JEL: D60, E31, E5, E7, I31
File-URL: https://hdl.handle.net/20.500.12182/1145
File-Format: Application/pdf
DOI: 10.33119/kaewps2023086
Handle: RePEc:sgh:kaewps:2023086