Consumer Price Perceptions and Expectations
AbstractThis paper examines qualitative quarterly survey data on U.K. consumers price anticipations in the context of a framework designed to allow the authors to test the predictive ability of consumers and the information content of this survey data. The results indicate that the survey data contains useful information but that it is biased in particular ways. Consumers appear to have short memories of past inflation but given this, they appear to use additional information to that contained in recent past price changes in order to forecast future inflation. In particular they may take current short term interest rates into account. Only those households expecting high inflation rates are important in predicting inflation. Copyright 1992 by Royal Economic Society.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Economic Papers.
Volume (Year): 44 (1992)
Issue (Month): 1 (January)
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Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
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Other versions of this item:
- Simmons, Peter & Weiserbs, Daniel, 1990. "Consumer Price Perceptions and Expectations," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1990011, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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- Yuxiang, Karl & Chen, Zhongchang, 2010. "Monetary policy credibility and inflationary expectation," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 487-497, August.
- Gärling, Tommy & Gamble, Amelie & Christandl, Fabian, 2013. "Income increases do not compensate for perceived inflation—A price-consumption anomaly," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 11-15.
- Gerberding, Christina, 2001. "The information content of survey data on expected price developments for monetary policy," Discussion Paper Series 1: Economic Studies 2001,09, Deutsche Bundesbank, Research Centre.
- Ranyard, Rob & Missier, Fabio Del & Bonini, Nicolao & Duxbury, Darren & Summers, Barbara, 2008. "Perceptions and expectations of price changes and inflation: A review and conceptual framework," Journal of Economic Psychology, Elsevier, vol. 29(4), pages 378-400, August.
- Jan Marc Berk & Gerbert Hebbink, 2006. "The anchoring of European inflation expectations," DNB Working Papers 116, Netherlands Central Bank, Research Department.
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