This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Comparing predictions and outcomes : theory and application to income changes

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Das, M.
Dominitz, J.
Soest, A. van (Tilburg University, Center for Economic Research)

Additional information is available for the following registered author(s):

Abstract

Household surveys often elicit respondents' intentions or predictions of future outcomes. The survey questions may ask respondents to choose among a selection of (ordered) response categories. If panel data or repeated cross-sections are available, predictions may be compared with realized outcomes. The categorical nature of the predictions data, however, complicates this comparison. Generalizing previous ndings on binary intentions data, we derive bounds on features of the empirical distribution of realized outcomes under the "best-case" hypothesis that respondents have rational expectations and that reported expectations are best predictions of future outcomes. These bounds are shown to depend on the assumed model of how respondents form their "best prediction" when forced to choose among (ordered) categories. An application to data on income change expectations and realized income changes illustrates how alternative response models may be used to test the best-case hypothesis.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://arno.uvt.nl/show.cgi?fid=3554
File Format: application/pdf
File Function:
Download Restriction: no
File URL: http://arno.uvt.nl/show.cgi?fid=3555
File Format: application/postscript
File Function:
Download Restriction: no

Publisher Info
Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 45.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length:
Date of creation: 1997
Date of revision:
Handle: RePEc:dgr:kubcen:199745

Contact details of provider:
Web page: http://center.uvt.nl

For technical questions regarding this item, or to correct its listing, contact: (Corry Stuyts).

Related research
Keywords:

Other versions of this item:

Find related papers by JEL classification:
C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation and Testing
C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Other Model Applications
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Carlson, John A & Parkin, J Michael, 1975. "Inflation Expectations," Economica, London School of Economics and Political Science, vol. 42(166), pages 123-38, May. [Downloadable!] (restricted)
  2. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Discussion Papers 96-01, University of Copenhagen. Department of Economics.
    Other versions:
  3. Lovell, Michael C, 1986. "Tests of the Rational Expectations Hypothesis," American Economic Review, American Economic Association, vol. 76(1), pages 110-24, March. [Downloadable!] (restricted)
  4. Das, Marcel & van Soest, Arthur, 1999. "A panel data model for subjective information on household income growth," Journal of Economic Behavior & Organization, Elsevier, vol. 40(4), pages 409-426, December. [Downloadable!] (restricted)
    Other versions:
  5. William Gould, 1993. "Quantile regression with bootstrapped standard errors," Stata Technical Bulletin, StataCorp LP, vol. 2(9). [Downloadable!]
  6. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1994. "Income Risk, Borrowing Constraints and Portfolio Choice," CEPR Discussion Papers 888, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  7. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1992. "Earnings uncertainty and precautionary saving," Journal of Monetary Economics, Elsevier, vol. 30(2), pages 307-337, November. [Downloadable!] (restricted)
    Other versions:
  8. J. Dominitz & C. F. Manski, . "Eliciting student expectations of the returns to schooling," Institute for Research on Poverty Discussion Papers 1049-94, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
    Other versions:
  9. J. Dominitz & C. F. Manski, . "Using expectations data to study subjective income expectations," Institute for Research on Poverty Discussion Papers 1050-94, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
    Other versions:
  10. repec:att:wimass:199217 is not listed on IDEAS
  11. James Tobin, 1957. "On the Predictive Value of Consumer Intentions and Attitudes," Cowles Foundation Discussion Papers 41, Cowles Foundation, Yale University. [Downloadable!]
  12. Wolfgang Hardle & Oliver Linton, 1994. "Applied Nonparametric Methods," Cowles Foundation Discussion Papers 1069, Cowles Foundation, Yale University. [Downloadable!]
    Other versions:
  13. repec:att:wimass:19895 is not listed on IDEAS
  14. Leonard, Jonathan S, 1982. "Wage Expectations in the Labor Market: Survey Evidence on Rationality," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 157-61, February. [Downloadable!] (restricted)
    Other versions:
  15. Keane, Michael P & Runkle, David E, 1990. "Testing the Rationality of Price Forecasts: New Evidence from Panel Data," American Economic Review, American Economic Association, vol. 80(4), pages 714-35, September. [Downloadable!] (restricted)
  16. Das, Marcel & van Soest, Arthur, 1997. "Expected and realized income changes: Evidence from the Dutch socio-economic panel," Journal of Economic Behavior & Organization, Elsevier, vol. 32(1), pages 137-154, January. [Downloadable!] (restricted)
    Other versions:
  17. Das, M. & Donkers, B., 1997. "How certain are Dutch households about future income? : an empirical analysis," Discussion Paper 38, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  18. Ilmakunnas, Seija & Pudney, Stephen, 1990. "A model of female labour supply in the presence of hours restrictions," Journal of Public Economics, Elsevier, vol. 41(2), pages 183-210, March. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Paul Frijters & John P. Haisken-DeNew & Michael Shields, 2003. "How Well Do Individuals Predict Their Future Life Satisfaction? Rationality and Learning Following a Nationwide Exogenous Shock," CEPR Discussion Papers 468, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
  2. Mauro Mastrogiacomo, 2006. "Testing consumers' asymmetric reaction to wealth changes," CPB Discussion Papers 53, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  3. Dean R. Hyslop & Guido W. Imbens, 2000. "Bias from Classical and Other Forms of Measurement Error," NBER Technical Working Papers 0257, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Xavier Ramos & Christian Schluter, 2006. "Subjective Income Expectations and Income Risk," IZA Discussion Papers 1950, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Das, M. & Soest, A. van, 2000. "Expected versus realized income changes : a test of the rational expectations hypothesis," Discussion Paper 105, Tilburg University, Center for Economic Research. [Downloadable!]
  6. Frijters, Paul & Haisken-DeNew, John P. & Shields, Michael A., 2002. "Individual Rationality and Learning: Welfare Expectations in East Germany Post-Reunification," IZA Discussion Papers 498, Institute for the Study of Labor (IZA). [Downloadable!]
  7. YU, Ge, 2003. "Comparing Expectations and Outcomes: Application to UK Data," MPRA Paper 502, University Library of Munich, Germany, revised 2005. [Downloadable!]
  8. Jürgen Arns & Kaushik Bhattacharya, 2005. "Modelling Aggregate Consumption Growth with Time-Varying Parameters," Bonn Econ Discussion Papers bgse15_2005, University of Bonn, Germany. [Downloadable!]
  9. Jeff Dominitz & Charles F. Manski, 2003. "How Should We Measure Consumer Confidence (Sentiment)? Evidence from the Michigan Survey of Consumers," NBER Working Papers 9926, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Giamboni Luigi & Waldmann Robert, 2004. "A behavioral model of consumption," Departmental Working Papers 202, Tor Vergata University, CEIS. [Downloadable!]
  11. Badi H. Baltagi, 2007. "Forecasting with Panel Data," Center for Policy Research Working Papers 91, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
    Other versions:
Statistics
Access and download statistics

Did you know? You too can volunteer for RePEc, for example by encouraging others to register as authors.

This page was last updated on 2008-9-21.


This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.