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Measuring Households' Inflation Expectations in the Euro Area: The Effect of Panel Conditioning

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  • Erwan Gautier
  • Jérémi Montornès

Abstract

This paper documents how inflation expectations as reported by households in the European Central Bank's Consumer Expectations Survey vary with the tenure of survey respondents. Inflation expectations are significantly lower after some months of repeated participation in the survey, by about 2 percentage points after one year. Panel conditioning effects are much stronger if households are initially less attentive to inflation. We also document that these negative effects could be partly due to survey fatigue increasing with tenure. Finally, we find that the panel conditioning effects are not specific to inflation: they are also strong for other macroeconomic variables such as unemployment but they are not significant for households' perceptions of their own consumption or income growth.

Suggested Citation

  • Erwan Gautier & Jérémi Montornès, 2025. "Measuring Households' Inflation Expectations in the Euro Area: The Effect of Panel Conditioning," Working papers 1007, Banque de France.
    • Handle: RePEc:bfr:banfra:1007
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    References listed on IDEAS

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    1. Michael Weber & Bernardo Candia & Hassan Afrouzi & Tiziano Ropele & Rodrigo Lluberas & Serafin Frache & Brent Meyer & Saten Kumar & Yuriy Gorodnichenko & Dimitris Georgarakos & Olivier Coibion & Geoff, 2025. "Tell Me Something I Don't Already Know: Learning in Low‐ and High‐Inflation Settings," Econometrica, Econometric Society, vol. 93(1), pages 229-264, January.
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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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