Learning-through-Survey in Inflation Expectations

49 Pages Posted: 9 Mar 2021

See all articles by GwangMin Kim

GwangMin Kim

University of Texas at Austin, Department of Economics

Carola Binder

Haverford College - Department of Economics

Date Written: September 27, 2020

Abstract

When surveys rely on repeat participants, this raises the possibility that survey participation may affect future responses, perhaps by prompting information acquisition between survey waves. We show that these "learning-through-survey" effects are large for household inflation expectations. Repeat survey participants generally have lower inflation expectations and uncertainty, particularly if their initial uncertainty was high. Consequently, repeat participants may be more informed, and not be representative of the broader population. This has important implications: for example, inflation expectations of new participants are more influenced by oil prices, and estimates of the elasticity of intertemporal substitution are lower for new participants.

Keywords: Inflation Expectation, Consumer Expectations, Learning, Panel Conditioning, Survey Data

JEL Classification: D83, D84, E31

Suggested Citation

Kim, GwangMin and Binder, Carola, Learning-through-Survey in Inflation Expectations (September 27, 2020). Available at SSRN: https://ssrn.com/abstract=3790834 or http://dx.doi.org/10.2139/ssrn.3790834

GwangMin Kim (Contact Author)

University of Texas at Austin, Department of Economics ( email )

Austin, TX
United States

HOME PAGE: http://sites.google.com/view/gmkim

Carola Binder

Haverford College - Department of Economics ( email )

Haverford, PA 19041
United States

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