Testing Rationality of Price Expectations on the Basis of Contingency Tables

Warsaw School of Economics Working Paper No. 1-07

18 Pages Posted: 9 Feb 2007

See all articles by Emilia Tomczyk

Emilia Tomczyk

Warsaw School of Economics (SGH)

Date Written: January 2007

Abstract

A method of analyzing rationality of expectations of economic agents, based on contingency tables, is applied to price expectations of Polish industrial enterprises. The source of data are surveys designed by the Economic Development Institute of the Warsaw School of Economics within the framework of business conditions surveys in industry. Empirical results clearly show that expectations of Polish entrepreneurs are not formed rationally. Rationality condition has been confirmed in such a limited number of cases that it is not even feasible to differentiate between private and public enterprises as far as rationality of their expectations is concerned. Price expectations seem to be even more irrational that industrial production expectations analyzed earlier.

Keywords: price expectations, rationality, survey data, contingency tables

JEL Classification: C42, C53, D84

Suggested Citation

Tomczyk, Emilia, Testing Rationality of Price Expectations on the Basis of Contingency Tables (January 2007). Warsaw School of Economics Working Paper No. 1-07, Available at SSRN: https://ssrn.com/abstract=962292 or http://dx.doi.org/10.2139/ssrn.962292

Emilia Tomczyk (Contact Author)

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
75
Abstract Views
1,440
Rank
684,971
PlumX Metrics