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Non-response Bias in Household Inflation Expectations Surveys

Author

Listed:
  • Meltem Chadwick
  • Rennae Cherry
  • Jaqueson K. Galimberti

Abstract

This paper uses micro-data from the Reserve Bank of New Zealand’s Household Inflation Expectations survey to obtain a more accurate read of households’ true inflation expectations by understanding how different demographic groups respond (or do not respond) to specific questions in the survey. Using a Heckman selection model, we assess whether there is item non-response bias in the survey by comparing the demographic characteristics of responders and non-responders. We quantify and demonstrate how to adjust for bias in aggregate (mean) measures of inflation expectations caused by item non-response. We show that there is a positive bias, and the aggregate inflation expectation series shifts down after the adjustment.

Suggested Citation

  • Meltem Chadwick & Rennae Cherry & Jaqueson K. Galimberti, 2023. "Non-response Bias in Household Inflation Expectations Surveys," CAMA Working Papers 2023-28, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2023-28
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2023-06/28_2023_chadwick_cherry_galimberti_0.pdf
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    Keywords

    inflation expectations; household surveys; item non-response; demographic heterogeneity;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy

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