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Workers’ Perceptions of Earnings Growth and Employment Risk
In addition to realized earnings and employment shocks, forward-looking individuals are presumed to condition their consumption and labor supply decisions on their subjective beliefs about future labor market risks. This paper uses rich panel data to document considerable individual heterogeneity in earnings growth expectations and in the perceived likelihood of voluntary and involuntary job exits. We examine how expectations evolve over the working life and business cycle, and how they co-vary with macroeconomic expectations and personal experiences. While largely consistent with patterns in ...
Working Paper
Oil Prices, Gasoline Prices and Inflation Expectations: A New Model and New Facts
The conventional wisdom that inflation expectations respond to the level of the price of oil (or the price of gasoline) is based on testing the null hypothesis of a zero slope coefficient in a static single-equation regression model fit to aggregate data. Given that the regressor in this model is not stationary, the null distribution of the t-test statistic is nonstandard, invalidating the use of the normal approximation. Once the critical values are adjusted, these regressions provide no support for the conventional wisdom. Using a new structural vector regression model, however, we ...
Working Paper
The Impact of Rising Oil Prices on U.S. Inflation and Inflation Expectations in 2020-23
Predictions of oil prices reaching $100 per barrel during the winter of 2021/22 have raised fears of persistently high inflation and rising inflation expectations for years to come. We show that these concerns have been overstated. A $100 oil scenario of the type discussed by many observers, would only briefly raise monthly headline inflation, before fading rather quickly. However, the short-run effects on headline inflation would be sizable. For example, on a year-over-year basis, headline PCE inflation would increase by 1.8 percentage points at the end of 2021 under this scenario, but only ...
Report
The sensitivity of housing demand to financing conditions: evidence from a survey
The sensitivity of housing demand to mortgage rates and available leverage is key to understanding the effect of monetary and macroprudential policies on the housing market. However, since there is generally no exogenous variation in these variables that is independent of confounding factors (such as economic conditions or household characteristics), it is difficult to cleanly estimate these sensitivities empirically. We circumvent these issues by designing a strategic survey in which respondents are asked for their willingness to pay (WTP) for a home comparable to their current one, under ...
Discussion Paper
Good News or Bad on New York City Jobs?
Unlike much of the nation, New York City has seen a robust rebound in employment since the recession. In early 2012, employment here reached 3.86 million, the largest number of jobs ever recorded. Yet the city’s unemployment rate has risen in recent months and is now 10 percent—its peak during the recession—and well above the 5 percent rate seen before the downturn. This lack of improvement reflects the fact that the number of employed residents of the city has not rebounded at all from its losses during the 2008-09 downturn. While commuters from outside the city have always been a part ...
Report
Expectations Data in Structural Microeconomic Models
A growing literature uses now widely available data on beliefs and expectations in the estimation of structural models. In this chapter, we review this literature, with an emphasis on models of individual and household behavior. We first show how expectations data have been used to relax strong assumptions about beliefs and outline how they can be used in estimation to substitute for, or as a complement to, data on choices. Next, we discuss the literature that uses different types of expectations data in the estimation of structural models. We conclude by noting directions for future research.
Working Paper
Mode effects in mixed-mode economic surveys: Insights from a randomized experiment
Web-based surveys have become increasingly common in economic, marketing, and other social science research. However, questions exist about the comparability of data gathered using a web interview and data gathered using more traditional survey modes, particularly for surveys on household economic behavior. Differences between data from different survey modes may arise through two different mechanisms: sample selectivity due to (lack of) web access and mode effects. This study leverages the randomized experimental design of the mixed-mode Cognitive Economics Study to examine mode effects ...
Working Paper
Speaking for Herself: Changing Gender Roles in Survey Response
Among married and cohabiting couples, the percentage of female respondents has increased substantially in the PSID (Panel Study of Income Dynamics) from 9% in 1968 to 60% in 2015. This shift in gender composition has taken place despite a formal policy that historically designated male heads of household as respondents. We use this shift as a case study to explore which characteristics are associated with women responding to the PSID and how different respondent gender compositions may affect data quality. First, we find that women are increasingly less likely to respond as their husband?s ...
Working Paper
Updates to the Sampling of Wealthy Families in the Survey of Consumer Finances
Participation in household surveys has fallen over time, making it harder to produce a household survey-like the Survey of Consumer Finances (SCF)-in a timely manner. To address these challenges, the reference year of the sampling frame data for the 2016 SCF wealthy oversample was shifted back one year, allowing the oversample to be selected earlier than the past. In implementing this change, though, we risk identifying an outdated set of families and introducing variability in the sampling process. However, we show that the set of families selected in the new frame are observationally ...