In the context of the Global Financial Crisis and derived long-term macroeconomic consequences, this paper employs recently published Flash Eurobarometer 356 data, in order to analyze the factors that affect variation in individual level subjective perceptions of economy, in a sample of 50,746 respondents representing 170 regions (NUTS I & II) of the EU member states. Following the recent attempt to measure regional Quality of Government (Charron and Lapuente, 2013), which confirmed that institutional and economic diversity leads to high within country variation on evaluations, this study argues that, ceteris paribus, institutions hindering clarity of responsibilities and the existence of politically relevant ethnic groups at the regional level explain the distortions in congruence between subjective evaluations and objective economic conditions. Employing a multilevel analysis, I demonstrate that these factors generate perception biases that tend to moderate the effects of the crisis, showing more indulgent judgments towards certain regional governments.
