Working Paper

The measurement of consumer expectations using survey data

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.

Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: Finance and Economics Discussion Series

Publication Date: 1999

Number: 1999-17