Watching the news and seeing iceberg lettuce is going off in price all of a sudden you feel the need, you want an iceberg lettuce.
Because the news is talking about it, that is an Availability Bias and a response to that.
Think toilet paper shortages caused by panic-buying (fear of missing out) during COVID. COVID added to our sense of missing out. Sadly the empty isles of supermarkets brought the worst out of some of us.
Suddenly that home near the beach on the Gold Coast took our interest.
Gold Coast had a 3% population increase in 2021 - the largest rise in Australia.
Potential changes to the Gold Coast town plan have seen developers driven by fear of missing out to harass property owners for amalgamation opportunities
However this leaves a distorted rental market. Gold Coast can't get enough hospitality workers and don't want to pay them liveable wages in a city that has extremely high rents. However to claim workers wage rises will fuel inflation ignores recent history.
The Centre for Future Work is an initiative of the Australia Institute, to conduct and publish progressive economic research on work, employment, and labour markets.
An old stereotype leftover from the 1970s that inflation starts in the labour market because workers demand too much money and then companies have no choice left to pass on higher prices, has nothing to do with the current inflation situation.
Wages have been weak, historically weak for almost a decade, including right now, even with the unemployment rate at 3.9%. The latest data we have on wages are growing at 2.4% over the last year, that's less than half the rate of inflation.
Business profits in Australia are higher as a share of GDP than they've ever been. So real wages are actually falling even though the unemployment rate is quite low. So this is more of a profit price problem.
The reason business profits rise is because they have pricing power. Take the energy market as an obvious example. Australia appears to have sleep-walked into an energy crisis whilst not moving quickly enough on renewables. Gas which we have in abundance, pricing is tied to world markets without an adequate reserve built in for the current emergency.
Inflationary problems are being caused by excessive profits. At the cost of workers. Dark hints that workers may be too greedy abound.
The urge to buy more products or cheaper products (fear of missing out) and buy now before prices go up is also fuelling inflation.
Another bias - the scarcity bias appears when things are in short supply.
Hence Reserve Bank Governor Phillip Lowe fears -:
The Joy of Missing Out is an antedote to the "shoulds" and "wants" that encompas fear of missing out. Being present and enjoying what you have is encouraged by physcologists, counsellors and Yoga Teachers alike.
Being present is about not being mentally absent. Being in the here and now.