Availability heuristic and inflation perceptions in pre-euro Bulgaria: micro-evidence on price-change salience among Bulgarian households

Abstract

Inflation perceptions shape household behavior and policy credibility, yet they often diverge from official statistics. This study examines whether price-change salience - how often people notice rising prices - is linked to perceived inflation among Bulgarian households in the pre-euro period. Using nationally representative, cross-sectional data from the June 2025 European Commission Consumer Survey for Bulgaria, collected in an omnibus by LOGO Market Research that included a brief author-designed behavioral module, we assess the association between noticing frequency and perceived inflation. The design relies on descriptive statistics, chi-square tests, and independent-samples t-tests. Limitations include the observational nature of the data, reliance on self-reports, item nonresponse for numeric perceptions, and a focus on a single cognitive factor, with other determinants left to future work. The analysis indicates that more frequent price observation is systematically associated with higher perceived inflation, consistent with an availability effect. We conclude that salience likely inflates subjective assessments even when official inflation is moderate. The paper’s originality lies in providing first micro-level behavioral evidence for Bulgaria’s pre-euro context, with practical implications for communication and expectation-management strategies aimed at sustaining public confidence during the currency transition.