Public Information and Household Expectations in Developing Countries: Evidence From a Natural Experiment
AbstractGovernments provide public information about economic conditions to reduce information imperfections and facilitate efficient allocation of resources. Do households in developing countries rely on public signals to inform themselves about market conditions? To identify the importance of public information in households’ price expectations, we take advantage of a unique natural experiment in Ecuador where the published inflation rate had been different from the true rate over a period of 14 months due to a software error. We find that the public signal about prices plays an important role in households’ price expectations; the effect is stronger for better educated families, older people and men.
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Bibliographic InfoPaper provided by The George Washington University, Institute for International Economic Policy in its series Working Papers with number 2009-08.
Length: 30 pages
Date of creation: Apr 2009
Date of revision:
Public Information; Price Expectations; Developing Countries; Natural Experiment; Heterogeneity;
Find related papers by JEL classification:
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- D10 - Microeconomics - - Household Behavior - - - General
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
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.:
- Jonung, Lars, 1981. "Perceived and Expected Rates of Inflation in Sweden," American Economic Review, American Economic Association, vol. 71(5), pages 961-68, December.
- Rodriguez-Clare, Andres, 1996. "The division of labor and economic development," Journal of Development Economics, Elsevier, vol. 49(1), pages 3-32, April.
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