The Measurement of Consumer Expectations Using Survey Data

24 Pages Posted: 30 Aug 1999

See all articles by Martha Starr

Martha Starr

American University - Department of Economics

Date Written: March 18, 1999

Abstract

Surveys of consumers collect considerable information on consumer expectations. However, the simple categorical structure of the questions -- such as "Do you expect your income to rise, fall, or stay the same?" -- makes their value for research uncertain. This paper analyzes the information content of the survey measures. I draw on Manski's finding that, while categorical questions do not identify the probability of an event occurring, they do provide information on probability bounds. I analyze data from two well-known surveys, showing that, although the bounds are often wide, for some measures they move closely with the series they are intended to track or predict.

JEL Classification: E21, D12, D84

Suggested Citation

Starr, Martha, The Measurement of Consumer Expectations Using Survey Data (March 18, 1999). Available at SSRN: https://ssrn.com/abstract=165428 or http://dx.doi.org/10.2139/ssrn.165428

Martha Starr (Contact Author)

American University - Department of Economics ( email )

4400 Massachusetts Avenue, N.W.
Washington, DC 20016-8029
United States
202-885-3747 (Phone)

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