On the accuracy of the probability method for quantifying beliefs about inflation
Open access
Autor(in)
Datum
2009-07Typ
- Working Paper
ETH Bibliographie
yes
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Abstract
This paper assesses the probability method for quantifying EU consumer survey data on perceived and expected inflation. Based on micro-data from the Swedish consumer survey that asks for both qualitative and quantitative responses, I find that the theoretical assumptions of the method do not hold. In particular, estimated models of response behavior indicate that qualitative inflation expectations are not ordered. Nevertheless, the probability method generates series that are highly correlated with the mean of actual quantitative beliefs. For quantifying the cross-sectional dispersion of beliefs, however, an index of qualitative variation outperforms the probability method. Mehr anzeigen
Persistenter Link
https://doi.org/10.3929/ethz-a-005859391Publikationsstatus
publishedZeitschrift / Serie
KOF Working PapersBand
Verlag
KOF Swiss Economic Institute, ETH ZurichThema
ECONOMETRICS AND ECONOMETRIC MODELS (OPERATIONS RESEARCH); REGION OF THE EUROPEAN UNION; Belief formation; ÖKONOMETRIE UND ÖKONOMETRISCHE MODELLE (OPERATIONS RESEARCH); Inflation expectations; REGION DER EUROPÄISCHEN UNION; Qualitative response data; INFLATION; Inflation perceptions; Quantification; MARKTFORSCHUNG; MARKET RESEARCHOrganisationseinheit
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
ETH Bibliographie
yes
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