Influence of non-response in business tendency surveys on the properties of expectations
AbstractExpectations concerning key economic variables certainly influence decisions undertaken by economic agents. Since assumption of rationality forms the basis of neoclassical economic theory, question of whether expectations of industrial enterprises are indeed formed rationally deserves careful attention. Direct data on expectations are available mainly through business tendency surveys. Non-response problem is present in almost every survey, and much higher non-response rates are observed for expectations than for realizations. Weighting systems used to control for size of respondents may also introduce bias into expectations data derived from business tendency surveys. In this paper, we analyze two basic properties of expectations rational in sense introduced by J. F. Muth – that is, unbiasedness and orthogonality – taking into account issue of non-response and weighting schemes. We propose several sample balance statistics to correct for changing sample structure that results from non-response; it depends on time, and is different from general population. We find that rationality of expectations of Polish industrial firms is not sensitive to these factors: independently from non-response and weighting issues, expectations concerning relative changes in production remain unbiased but not efficient with respect to freely available information.
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Bibliographic InfoPaper provided by Department of Applied Econometrics, Warsaw School of Economics in its series Working Papers with number 41.
Length: 32 pages
Date of creation: 30 Dec 2009
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expectations; rationality; non-response; weighting; survey data; qualitative data;
Find related papers by JEL classification:
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
- C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-16 (All new papers)
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- Barbara Kowalczyk & Emilia Tomczyk, 2011. "Non-response and Weighting Systems in Business Tendency Surveys; Are Expectations Influenced?," Prace i MateriaÅ‚y, Instytut Rozwoju Gospodarczego (SGH), Instytut Rozwoju Gospodarczego (SGH), vol. 86(2), pages 101-119, January.
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