Modelling consumers' qualitative perceptions of inflation

Repeated surveys about opinions, perceptions or attitudes of the interviewees are regularly carried out by national statistical offices. This is the case of the surveys concerning the qualitative assessment or anticipations on price level that ISTAT carries out every month. Earlier studies of perceived and expected inflation focussed either on quantifying the observed ordinal data in order to derive indices of perceived (or expected) inflation or on searching explicative models that could describe data in terms of economic explanatory variable. In this article, we discuss an innovative model for time seriesordinal data that extends the well established CUB model (Piccolo et al.,2018) to allow for time varying parameters. The method is illustrated by its application to the qualitative perceptions of inflation in Italy.