How attention and media coverage impact consumer attitudes about the cost of living

Stephen Whiteside

How consumers think about the cost of living is heavily influenced by media coverage and the actual rate of inflation, according to a working paper from the Federal Reserve Bank of Boston.

For economists, inflation is typically considered in hard numbers, coupled with an assumption that consumers will act rationally as they adapt to emerging financial pressures.

Marketers, by contrast, know that emotion, attention and perception are vital drivers of real-life shopper habits, and often trump ideas about how people should, in theory, behave in periods of disruption.

Helpful guidance in that regard comes from a new working paperby Anat Bracha, an associate professor at the Hebrew University of Jerusalem Business School, and Jenny Tang, a senior economist in the research department at the Federal Reserve Bank of...

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