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Practice makes perfect: Learning effects with household point and density forecasts of inflation

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  • Mitchell, James
  • Shiroff, Taylor
  • Braitsch, Hana

Abstract

This paper shows how both the characteristics and the accuracy of the point and density forecasts from a well-known panel data survey of households’ inflationary expectations – the New York Fed’s Survey of Consumer Expectations – depend on the tenure of survey respondents. Households’ point and density forecasts of inflation become significantly more accurate with repeated practice of completing the survey. These learning gains are best identified when tenure-based combined density forecasts are constructed. Tenured households produce more accurate density forecasts, although on average they remain underconfident in their own forecasting performance.

Suggested Citation

  • Mitchell, James & Shiroff, Taylor & Braitsch, Hana, 2026. "Practice makes perfect: Learning effects with household point and density forecasts of inflation," International Journal of Forecasting, Elsevier, vol. 42(2), pages 315-329.
    • Handle: RePEc:eee:intfor:v:42:y:2026:i:2:p:315-329
    DOI: 10.1016/j.ijforecast.2025.06.002
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    Keywords

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    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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