The Inflation Illusion: How New Zealand Households Overestimate Increases in Food Prices

TL;DR

New Zealand households greatly overestimate how much food prices have increased, with women and younger people perceiving higher inflation than official data shows.

Contribution

The study reveals a significant overestimation of food price inflation by New Zealand households, with gender and age influencing perceptions.

Findings

Respondents estimated food price inflation to be over seven times higher than official figures.

Women reported higher inflation estimates than men, and perceived inflation decreased with age.

Differences in inflation perception were most pronounced around the median and upper quantiles.

Abstract

Using nationally representative survey data collected in February 2025, this article examines how New Zealand households perceive food price inflation. We find that perceived food price inflation significantly exceeds the official rate, with respondents estimating food price inflation to be over seven times higher than reported figures. Perceptions vary by age and gender: women report higher inflation estimates than men, and perceived inflation decreases with age. Quantile regressions suggest that these differences are concentrated around the median and the upper quantile of the distribution of inflation perceptions. These findings highlight a misalignment between statistical reporting and lived experience, with implications for nutrition, wellbeing, and communication of economic data.

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