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Published Version (Advanced Access)CC BY-NC-ND V4.0, Open Access
Journal article
Inflation perceptions and petrol prices in New Zealand
New Zealand Economic Papers, Vol.Advanced access
2025
Appears in UniSC Supported Open Access Outputs
Abstract
Petrol prices are easily noticed and widely discussed. Thus, they may disproportionately influence how individuals form perceptions of inflation. We examine whether, and to what extent, petrol price shocks influenced inflation perceptions and headline inflation in New Zealand. To this end, we estimate structural vector autoregressions using Bayesian techniques. Two identification strategies are employed, with one relying on sign and zero restrictions and the other on partial identification. The results show that petrol price shocks had a slightly delayed, small and persistent effect on inflation perceptions, whereas their effect on headline inflation was instantaneous and short-lived. Shocks to overall energy prices produced effects similar to those of petrol price shocks. These findings suggest that fluctuations in petrol prices may help explain divergences between perceived and actual inflation.
Details
- Title
- Inflation perceptions and petrol prices in New Zealand
- Authors
- Puneet Vatsa (Corresponding Author) - University of the Sunshine Coast, Queensland, School of Business and Creative IndustriesGabriel Pino - Universidad Diego Portales
- Publication details
- New Zealand Economic Papers, Vol.Advanced access
- Publisher
- Routledge
- DOI
- 10.1080/00779954.2025.2562988
- ISSN
- 1943-4863; 0077-9954
- Copyright note
- © 2025 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.
- Organisation Unit
- School of Business and Creative Industries
- Language
- English
- Record Identifier
- 991168208802621
- Output Type
- Journal article
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