NEW YORK: Almost a decade ago, the economists Francesco D’Acunto, Ulrike Malmendier and Michael Weber examined the responses given by 18,000 Americans to the Chicago Booth Expectations and Attitudes Survey.
The study, by the University of Chicago’s Booth School of Business, tracked consumer attitudes to the economy and showed that, measured overall, on average women expected future price growth of 5.1 per cent while men projected inflation of “only” 4.6 per cent.
Women tended to base their expectations on grocery shopping; when asked what item they tracked most closely, their top choice was milk. By contrast, men watched gasoline prices, as they did far less grocery shopping on average.
In families where men did an equal amount of grocery shopping, the inflation projections of the men and women were found to be more similar. “Traditional gender roles … expose women to different signals about prices than men,” the group concluded, noting that this generated “divergent beliefs about future inflation”.
And while a gap of less than 1 percentage point does not seem enormous, it is more striking when you learn that at the time of the study (2015) actual reported inflation in the US was less than 2 per cent.
HUMANS ARE NEVER ENTIRELY RATIONAL
We are, of course, all creatures of our own environments. But the above distinction seems worth noting again now, when central banks are scrambling to bring spiralling prices under control.
After all, if consumers think that price growth will stay high, they may demand higher wages, creating a possible inflationary spiral; but if they are confident prices can be contained, it should be easier for central bankers to do their jobs.