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What do Italian consumers know about Economic Data? Evidence from the Istat Consumer Survey

Author

Listed:
  • Enrico Giovannini

    (University of Rome Tor Vergata)

  • Marco Malgarini

    (Anvur)

  • Raffaella Sonego

    (Italian National Institute of statistics)

Abstract

Standard theory describes economic decisions as result of optimising behaviour of well- informed agents. However, according to the “rational inattention” hypothesis, individuals may deliberately choose not to update their information set. The aim of our paper is study whether Italian consumers are adequately informed about economic data and to test if information is homogenously spread across the population. For this scope, we build a measure of knowledge of economic data at the individual level, and estimate a model relating knowledge to individual characteristics. Our main finding is that knowledge is relatively low and depends on the perceived costs and benefits of acquiring information. Results confirm one of the main postulates of the rational inattention hypothesis, i.e. that knowledge is highly differentiated across different population groups.

Suggested Citation

  • Enrico Giovannini & Marco Malgarini & Raffaella Sonego, 2015. "What do Italian consumers know about Economic Data? Evidence from the Istat Consumer Survey," Rivista di statistica ufficiale, ISTAT - Italian National Institute of Statistics - (Rome, ITALY), vol. 17(3), pages 25-47.
    • Handle: RePEc:isa:journl:v:17:y:2015:i:3:p:25-47
    as

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    References listed on IDEAS

    as
    1. Author-Name: Alan S. Blinder & Alan B. Krueger, 2004. "What Does the Public Know about Economic Policy, and How Does It Know It?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(1), pages 327-397.
    2. Reis, Ricardo, 2006. "Inattentive consumers," Journal of Monetary Economics, Elsevier, vol. 53(8), pages 1761-1800, November.
    3. N. Gregory Mankiw & Ricardo Reis, 2002. "Sticky Information versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1295-1328.
    4. repec:pri:cepsud:99blinderkrueger is not listed on IDEAS
    5. Giovannini, Enrico & Malgarini, Marco, 2012. "What do Italian consumers know about Economic Data? An analysis based on the ISTAT Consumers Survey," MPRA Paper 54125, University Library of Munich, Germany, revised 2014.
    6. Ricardo Reis, 2009. "A Sticky-information General Equilibrium Model por Policy Analysis," Central Banking, Analysis, and Economic Policies Book Series, in: Klaus Schmidt-Hebbel & Carl E. Walsh & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series (ed.),Monetary Policy under Uncertainty and Learning, edition 1, volume 13, chapter 8, pages 227-283, Central Bank of Chile.
    7. Flora Fullone & Bianca Maria Martelli, 2008. "Re-thinking the ISAE Consumer Survey Processing Procedure," ISAE Working Papers 92, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    8. Souleles, Nicholas S, 2004. "Expectations, Heterogeneous Forecast Errors, and Consumption: Micro Evidence from the Michigan Consumer Sentiment Surveys," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(1), pages 39-72, February.
    9. Alan Blinder & Alan Krueger, 2004. "What Does the Public Know about Economic Policy, and How Does It Know It?," Working Papers 875, Princeton University, Department of Economics, Industrial Relations Section..
    10. Author-Name: Alan S. Blinder & Alan B. Krueger, 2004. "What Does the Public Know about Economic Policy, and How Does It Know It?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(1), pages 327-397.
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    More about this item

    Keywords

    Rational inattention; Household information acquisition; information and knowledge; consumer confidence; statistical literacy; media exposure.;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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