MEASURING INFLATION CREDIBILITY: RESULTS OF A FIRST REPRESENTATIVE SOUTH AFRICAN SAMPLE

This study reports the measurement of inflation credibility of a representative sample of the South African population in terms of an inflation credibility barometer. The barometer is an instrument measuring the degree of acceptance of the accuracy of historic inflation figures. These research results serve as a benchmark for South Africa, as similar measurement of a representative sample has not been undertaken before. The sampling results show little public understanding of the rate of inflation and its measurement of average price increases experienced by an average household. As generally accepted international benchmarks for successful central-bank communication strategies do not exist, the application of the methodology reported in this paper can improve the effectiveness of central bank communication aimed at improving the general knowledge about inflation.