IDEAS home Printed from https://ideas.repec.org/p/een/camaaa/2021-45.html
   My bibliography  Save this paper

Priming in inflation expectations surveys

Author

Listed:
  • Monique Reid
  • Hanjo Odendaal
  • Pierre L. Siklos
  • Stan Du Plessis

Abstract

Since the global financial crisis of 2007/2008, there has been increased attention on inflation expectations and the use of central bank communication as a tool to achieve a central bank’s objective for inflation. However, much of this research analyses the survey data with limited consideration of the survey design that generated the data, or the differences across surveys and countries. In this research note, we focus on one element of South Africa’s Bureau of Economic Research household inflation expectation survey question – the inclusion of a historical inflation number in the survey question. Using a dataset created by Pienaar (2018), we are able to evaluate the impact of its inclusion on the data created. We find that the inclusion of a historical inflation number into the survey question, distorts survey responses, particularly a group considered to be relatively ‘less rational’. We do not investigate whether this bias is caused by anchoring (Tversky & Kahneman (1974), learning (Cavallo, Cruces, & Perez-Truglia, 2017), or any other theory, but we do argue that the observed bias should raise concern about the interpretation of surveys, where the question includes any form of extra information (priming). The impact not only distorts the level of the response, it also leads to changes in the distribution.

Suggested Citation

  • Monique Reid & Hanjo Odendaal & Pierre L. Siklos & Stan Du Plessis, 2021. "Priming in inflation expectations surveys," CAMA Working Papers 2021-45, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  • Handle: RePEc:een:camaaa:2021-45
    as

    Download full text from publisher

    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2021-05/45_2021_reid_odendaal_siklos_du_plessis.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    inflation expectations; survey design; priming;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:een:camaaa:2021-45. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cama Admin (email available below). General contact details of provider: https://edirc.repec.org/data/asanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.