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Journal Article
Changes in U.S. family finances from 2004 to 2007: evidence from the Survey of Consumer Finances
The Federal Reserve Board's Survey of Consumer Finances for 2007 provides insights into changes in family income and net worth since the 2004 survey. The survey shows that, over the 2004-07 period, the median value of real (inflation-adjusted) family income before taxes was little changed, while mean income climbed 8.5 percent. Unlike family income over this period, both median and mean net worth increased; the median rose 17.7 percent, and the mean rose 13.0 percent. This article reviews these and other changes in the financial condition of U.S. families, including developments in assets, ...
Report
The price is right: updating of inflation expectations in a randomized price information experiment
Understanding the formation of consumer inflation expectations is considered crucial for managing monetary policy. This paper investigates how consumers form and update their inflation expectations using a unique ?information? experiment embedded in a survey. We first elicit respondents? expectations for future inflation either in their own consumption basket or for the economy overall. We then randomly provide a subset of respondents with inflation-relevant information: either past-year food price inflation, or a median professional forecast of next-year overall inflation. Finally, inflation ...
Report
Merchant steering of consumer payment choice: lessons learned from consumer surveys
Recent policy changes allow merchants to influence consumers? choice of payment instruments by offering price discounts and other incentives. This report describes lessons learned from using consumer survey responses to assess whether merchants tried to influence buyers? choice of payment method. To measure the effects of these recent policy changes, we included questions about merchant steering in pilot versions of a new diary survey of U.S. consumers. Our findings are inconclusive because some respondents interpreted the questions differently from the way we intended. This report aims to ...
Report
Inflation expectations and behavior: Do survey respondents act on their beliefs?
We compare the inflation expectations reported by consumers in a survey with their behavior in a financially incentivized investment experiment designed such that future inflation affects payoffs. The inflation expectations survey is found to be informative in the sense that the beliefs reported by the respondents are correlated with their choices in the experiment. Furthermore, most respondents appear to act on their inflation expectations showing patterns consistent (both in direction and magnitude) with expected utility theory. Respondents whose behavior cannot be rationalized tend to be ...