The cost of clothing was a case in point. Over the past two and a half years, the price of clothing has fallen 4.3 per cent, but 44 per cent said that they were paying a little or a lot more. Only 10 per cent answered that they were paying “a little or a lot less” for their clothing.
It was a similar, yet more extreme, picture for petrol, where prices have fallen by 7.0 per cent over the past two and half years. Yet 59 per cent of respondents in the Essential Research survey indicated that they were paying more for petrol, and only 8 per cent said they were paying less.
Interestingly, in all 10 categories covered in the poll, a significant majority of consumers indicated that they were a little or a lot more for the item in question, even when prices had fallen.
Part of the question of “paying more or paying less” may be linked to changes in spending patterns – medial and dental costs might fall, for example, if your health has improved and you are in fact paying less. So too with education if your children have finished school, you will be spending less on schooling. But the critical point is that consumers perceive that the price of everything always goes up, regardless of whether it does or not.
And it should be noted, that even in a climate of record low wages growth, wages have increased by a touch over 5 per cent since the end of 2014, which is a little above the overall rate of inflation and it indicates that household purchasing power has actually improved over that time.
All of which goes to show that perceptions can and often do overwhelm facts.