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Quantifying subjective uncertainty in survey expectations

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  • Krüger, Fabian
  • Pavlova, Lora

Abstract

An increasing number of household and firm surveys ask for subjective probabilities that the inflation rate falls into various outcome ranges. We provide a new measure of the uncertainty implicit in such probabilities. The measure has several advantages over existing methods: It is robust, trivial to implement, requires no functional form assumptions, and is well-defined for all logically possible probabilities. These advantages are particularly relevant when analyzing microdata from extensive consumer surveys. We illustrate the new measure using data from the Survey of Consumer Expectations.

Suggested Citation

  • Krüger, Fabian & Pavlova, Lora, 2024. "Quantifying subjective uncertainty in survey expectations," International Journal of Forecasting, Elsevier, vol. 40(2), pages 796-810.
  • Handle: RePEc:eee:intfor:v:40:y:2024:i:2:p:796-810
    DOI: 10.1016/j.ijforecast.2023.06.001
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    Cited by:

    1. Joris Wauters & Zivile Zekaite & Garo Garabedian, 2024. "Owner-occupied housing costs, policy communication, and inflation expectations," Working Paper Research 449, National Bank of Belgium.
    2. Hana Braitsch & James Mitchell & Taylor Shiroff, 2024. "Practice Makes Perfect: Learning Effects with Household Point and Density Forecasts of Inflation," Working Papers 24-25, Federal Reserve Bank of Cleveland.
    3. Niklas Valentin Lehmann, 2024. "Mechanisms for belief elicitation without ground truth," Papers 2409.07277, arXiv.org, revised Dec 2024.

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