Measuring Expectations of Inflation: Effects of Survey Mode, Wording, and Opportunities to Revise

Bruin, Wändi Bruine de; Klaauw, Wilbert van der; Rooij, Maarten van; Teppa, Federica; Vos, Klaas de

doi:10.2139/ssrn.2745831

Cited by 8 publications

(13 citation statements)

References 48 publications

(80 reference statements)

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“…and 3 are not significant), irrespective of which measure of expectations we use (point or distribution). In subsequent waves, there are few differences in the weights assigned to prior beliefs between the treatment and control groups, confirming that the information about recent inflation in the treatments has no discernible long-lived effect on inflation expectations of Dutch 13 Bruine deBruin et al (2017) document that the wording of questions may influence the response.…”

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confidence: 75%

How Does Consumption Respond to News about Inflation? Field Evidence from a Randomized Control Trial

et al. 2019

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We implement a survey of Dutch households in which random subsets of respondents receive information about inflation. The resulting exogenously generated variation in inflation expectations is used to assess how expectations affect subsequent monthly consumption decisions relative to those in a control group. The causal effects of reduced inflation expectations on non-durable spending are imprecisely estimated but there is a sharp positive effect on durable spending. We provide evidence that this is likely driven by the fact that Dutch households seem to become more optimistic about their real income as well as aggregate spending when they decrease their inflation expectations. There is little evidence to support the idea that the degree to which respondents change their beliefs or their spending in response to information treatments depends on their level of cognitive or financial constraints.

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confidence: 75%

How Does Consumption Respond to News about Inflation? Field Evidence from a Randomized Control Trial

et al. 2019

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“…The variation around estimates was calculated using the mean absolute deviation from the median of participant's estimates (see Bruine de Bruin et al., 2017). Specifically, within each of the 12 conditions (uncertainty type

\times

display format), the median estimate was summarized for each medication and treatment effect size.…”

Section: Methodsmentioning

confidence: 99%

“…Our primary dependent variable is how people summarize estimates and how much estimates vary around the median of individual estimates (see, e.g., Bruine de Bruin, van der Klaauw, van Rooij, Teppa, & de Vos, 2017). For instance, given one estimate or two estimates with the same median, upper and lower values but attributable to different types of uncertainty, how do participants summarize the evidence and is there consistency across uncertainty types and display formats?…”

Section: Overview Of Study and Hypothesesmentioning

confidence: 99%

“…For instance, given one estimate or two estimates with the same median, upper and lower values but attributable to different types of uncertainty, how do participants summarize the evidence and is there consistency across uncertainty types and display formats? This metric reflects how much participant estimates differ from one another and has been used to evaluate the effect of survey modes and wording differences on estimates of inflation (Bruine de Bruin et al., 2017). It can therefore provide insights into how consistent participant's summaries are across uncertainty communications and whether certain display formats suggest more consistent interpretations than others.…”

Section: Overview Of Study and Hypothesesmentioning

confidence: 99%

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Communicating Uncertainties About the Effects of Medical Interventions Using Different Display Formats

McDowell

Kause

2021

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Communicating uncertainties in scientific evidence is important to accurately reflect scientific knowledge , increase public understanding of uncertainty, and to signal transparency and honesty in reporting. While techniques have been developed to facilitate the communication of uncertainty, many have not been empirically tested, compared for communicating different types of uncertainty, or their effects on different cognitive, trust, and behavioral outcomes have not been evaluated. The present study examined how a point estimate, imprecise estimate, conflicting estimates, or a statement about the lack of evidence about treatment effects, influenced participant's responses to communications about medical evidence. For each type of uncertainty, we adapted three display formats to communicate the information: tables, bar graphs, and icon arrays. We compared participant's best estimates of treatment effects, as well as effects on recall, subjective evaluations (understandability and usefuleness), certainty perceptions, perceptions of trustworthiness of the information, and behavioral intentions. We did not find any detrimental effects from communicating imprecision or conflicting estimates relative to a point estimate across any outcome. Furthermore, there were more favorable responses to communicating imprecision or conflicting estimates relative to lack of evidence, where participants estimated the treatment would improve outcomes by 30–50% relative to a placebo. There were no differences across display formats, suggesting that, if well‐designed, it may not matter which format is used. Future research on specific display formats or uncertainty types and with larger sample sizes would be needed to detect small effects. Implications for the communication of uncertainty are discussed.

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“…A subset of these surveys is wholly or partially designed by other Federal Reserve Banks. 14 Bruine de Bruin et al (2016).…”

Section: The Survey Of Consumer Expectationsmentioning

confidence: 99%

The Advantages of Probabilistic Survey Questions

Potter

Negro

Topa

et al. 2017

REA

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In monetary policymaking, central bankers have long pointed out the importance of measuring the expectations of financial market participants, households, and firms —especially with regard to inflation and the central bank’s so-called “reaction function” to changes in the economic outlook. In addition to model- and market-implied measures, there has been a growing interest in and reliance on survey-based measures of subjective expectations. This article describes two major innovative survey initiatives conducted by the New York Fed to measure policy-relevant expectations of households and market participants: the Survey of Consumer Expectations, and the Survey of Primary Dealers and Survey of Market Participants. A key feature of these surveys is its use of a probabilistic question format to elicit the likelihood respondents assign to different future events. We discuss the advantages of using probabilistic questions, illustrate their value in more fully measuring beliefs and uncertainty, and document the pervasiveness and importance of heterogeneity in beliefs among our survey respondents.

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Measuring Expectations of Inflation: Effects of Survey Mode, Wording, and Opportunities to Revise

Cited by 8 publications

References 48 publications

How Does Consumption Respond to News about Inflation? Field Evidence from a Randomized Control Trial

How Does Consumption Respond to News about Inflation? Field Evidence from a Randomized Control Trial

Communicating Uncertainties About the Effects of Medical Interventions Using Different Display Formats

The Advantages of Probabilistic Survey Questions

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