Measurement of Inflation and Consumers’ Perception of Prices
“The prices displayed in stores are not necessarily reflected in the official inflation figures, as they are still modified by the statistical authorities (…) The perception of the standard of living depends very much on the measurement of prices. If we had a higher measured inflation rate – as our alternative inflation measures suggest – then the price-adjusted wage development might have been negative for a period of up to 20 years.”
– Gunther Schnabl, economist at the University of Leipzig, in “The gap between feeling and measurement – Prices have risen much more strongly in the Corona crisis than in the statistics. Economists criticize the calculation of the official inflation rate”, Handelsblatt, October 5, 2020, No. 192
