The Measurement of Consumer Expectations Using Survey Data
24 Pages Posted: 30 Aug 1999
Date Written: March 18, 1999
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: Suggested Citation