The High Cost of Living in Israel

The high cost of living in the country is the issue of most concern to Israelis. The majority of the public (60%) believes that the government is mainly responsible for it.

A public opinion survey on the high cost of living in Israel, published ahead of the "May 2023 Eli Hurvitz Conference on Economics and Society", sheds light on the financial behavior and attitudes of the Israeli public and reveals that the high cost of living in the country is the issue of most concern to Israelis. The majority of the public (60%) believes that the government is mainly responsible for the high cost of living. Around 75% have been forced in the last year to forgo some type of expenditure.

• The issue that most concerns the Israeli public is the high cost of living, cited by 31% of respondents as the issue that worries them most.
• After the high cost of living, by a fair distance, are three issues of concern: tensions between different groups in Israeli society (17%); the future of Israel as a democratic state (15%); and personal security (15%)
• Around 37% of respondents cited one of three issues that reflect public concerns about the consequences of the judicial system reforms as the most worrying national issue today (tensions between groups in society, the future of Israel as a democratic state, and the independence of the judicial system).
• While the share of those who are worried about the high cost of living declines with age, the share of those worried about issues relating to the consequence of the judicial reforms increases with age.
• The share of respondents worried about the future of Israel as a democratic state or about tensions between different groups in society also rises with income.
• The issue of personal security is of greater concern to residents of southern Israel, among whom it shares equal billing with the issue of the high cost of living.
• Around two-thirds of respondents think that food prices are the most significant factor in the high cost of living, while around half blame housing costs, and 29% cite indirect taxation.
• Almost 60% of the public believe that the government is the main responsible for the high cost of living in Israel, while only 27% blame the large monopolies, and a tiny minority (3–4%) attribute responsibility to local manufacturers, importers, or supermarket chains.
• The majority of respondents awarded the government a grade of “unsatisfactory” or “fail” for its policies to lower the cost of living, lower housing costs, maintain Israel’s economic resilience, and reduce social inequality.
• Around two-thirds think that Israel’s economic situation has become worse or significantly worse since the same period last year, and around half report that their personal financial situation has worsened.
• Around 75% of respondents said that they have been forced to give up some type of expenditure in the last year. More than half said they had refrained from some form of leisure activity (movie, show, restaurant, or vacation); 27% had refrained from purchasing a car; 26% had given up foodstuffs or other basic products; 21% had refrained from buying appliances; 14% from purchasing an apartment; and 12% had cut back on education or health expenditure.

 

The Center for Governance and the Economy at the Israel Democracy Institute published today a public opinion survey on the high cost of living and the economy in Israel. The survey was conducted between April 27 and May 1, with a representative sample of the Israeli adult population comprising 761 men and women aged 18 and above. The survey, conducted by Daphna Aviram-Nitzan and Nadav Porat Hirsh, examined opinion about major issues on the public agenda, with an emphasis on the economic issues that concern the Israeli public.

The findings are being published in advance of the Israel Democracy Institute’s Eli Hurvitz Conference on Economics and Society, which will be held on May 30 with the participation of ministers and Knesset members, directors-general of government ministries and other senior public officials, senior figures in the business sector and the high-tech industry, and representatives of civil society and academia.

Daphna Aviram-Nitzan, director of the Center for Governance and the Economy at the Israel Democracy Institute:

“The Israeli public cites the high cost of living (and food prices in particular) as the most worrying issue it faces, and blames the government, which it views as responsible for high prices and high housing costs. The survey finds that the public distinguishes clearly between the responsibility of companies in the private sector and that of the government, and explicitly states that the government bears the main responsibility. Moreover, it appears that the public is dissatisfied with how the government has handled this issue, which is not adequately addressed in the state budget, and gives the government a poor grade for its functioning regarding the cost of living and housing costs. In addition, the public voices its fears about the consequences of the reforms to the judicial system, in particular citing concerns about the tensions between different groups in Israeli society, about the future of Israel as a democratic state, and about the independence of the judicial system. In this context, the public once again points the finger of blame at the government, giving it an extremely low grade for its functioning with regard both to Israel’s financial resilience and reducing social inequalities.”

Prof. Itai Ater, Senior Fellow at the Israel Democracy Institute:

“The Israeli public views the government as the main actor responsible for the high cost of living in Israel, and particularly for high food prices, and expects the government to roll up its sleeves and do what it takes to bring prices down. This expectation is not being met in practice, and in the last month alone we have seen a wave of increases in food prices. The dam has burst, and almost all the major food companies have raised their prices, some of them significantly. It would seem that the food industry, which in the past was wary of a backlash from the public and the government, is taking advantage of the current situation in which public and government attention is focused on other issues, to raise prices and increase their profits at the public’s expense.”