The Effects of Inflation Information: Rates, Prices, and Politics in the Public Mind

Although many scholars and political analysts see rising prices as critical to recent election results in the United States (and elsewhere), we know surprisingly little about how people think about and process inflation information. Our study first finds that many citizens conflate how trends in inflation rates relate to trends in prices. We then implemented two large survey experiments to assess how inflation and price information affects perceptions of the broader economy and presidential approval. Our designs exploit both between- and within-subjects comparisons to better understand (1) the degree and (2) the conditions under which citizens adjust perceptions in response to inflation information. Our study reveals that inflation information can have a substantial impact on evaluations of economic and presidential performance. Yet, such effects are highly conditional upon whether this information depicts changes in inflation rates or changes in prices. We conclude with implications for political communication and elite framing.