Why the perceived inflation is higher than the inflation rate (Handelsblatt)

It is repeatedly criticized that the inflation rate does not necessarily reflect how the price development is perceived. In an interview with the "Handelsblatt", Prof. Volker Wieland explains the effects of the different handling of rents and owner-occupied housing on the measurement of inflation

"Consumer spending on rent is already a large part of the shopping cart. However, this neglects the fact that consumers who live in their own properties also have associated acquisition and maintenance costs. This should be considered." In Southern European countries this phenomenon is even more important due to the higher ownership rate, continued Wieland.

The European Central Bank (ECB) observes the inflation trend on the basis of the Harmonized Index of Consumer Prices (HICP). Owner-occupied housing is not taken into account.

Handelsblatt: "Warum die gefühlte Inflation so viel höher ist als die gemessene"