Australians do not have a cost of living crisis, it is more a case of keeping up with the Joneses, according to the Reserve Bank.
In a report released yesterday, economists say most people have little idea of the true cost of life improvements - from cheaper cars to iPhones.
Both sides of politics have argued cost of living pressures are the most pressing facing voters.
The Reserve found, across the traditional consumer price index and other measures, that there had been only a "moderate" increase in costs across the community.
Cumulative inflation since 2003 for the nation's poorest 20 per cent has climbed 39 per cent. For the richest 20 per cent, inflation has climbed 35 per cent.
In the same period, incomes for all groups grew faster than the cost of living.
According to researchers David Jacobs, Dilhan Perera and Thomas Williams, many people have trouble understanding what has happened with prices.
Big price rises catch consumers' attention but slow falls are rarely acknowledged.
Over time, consumers are not comparing the cost of achieving the same standard of living but of a reasonable or improved standard.
When a neighbour buys a new car or runabout, people become envious of the apparent lift in living standards next door.
"Perceived increases in the cost of living may partly reflect the cost of attaining a higher standard of living for many households," they found.
"There is also evidence that individuals' perceptions about their wellbeing are formed not purely in absolute terms, but partly by comparing themselves with those around them - colloquially termed keeping up with the Joneses."
Advances in technology, and dramatically lower prices for goods such as cars and computing equipment, have also delivered much improved goods at a lower real cost to most Australians.