Intrahousehold Disagreement about Macroeconomic Expectations
Journal of Finance, Forthcoming
92 Pages Posted: 7 Nov 2023 Last revised: 27 Mar 2024
Date Written: October 9, 2023
Abstract
This paper highlights the simple fact that households typically consist of multiple members who may hold divergent views, a fact that existing approaches to measuring and modeling household macroeconomic expectations largely abstract from. Using unique data on macroeconomic expectations of both spouses, I document substantial intrahousehold disagreement about inflation, economic recessions, and stock market returns. I further show that household asset allocation decisions are shaped by disagreement between spouses about future stock returns, and a pre-registered randomized survey experiment confirms the causal impact of such disagreement on portfolio choice. Additional investigation reveals the central role played by information at the belief aggregation stage of the decision-making process between spouses with heterogeneous beliefs.
Keywords: macroeconomic expectations, intrahousehold financial decision-making, randomized survey experiment, information acquisition
JEL Classification: D14, D83, D84, G11
Suggested Citation: Suggested Citation