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The measurement of consumer expectations using survey data

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  • Martha Starr-McCluer

Abstract

Surveys of consumers collect considerable information on consumer expectations. However, the simple categorical structure of the questions -- such as \"Do you expect your income to rise, fall, or stay the same?\" -- makes their value for research uncertain. This paper analyzes the information content of the survey measures. I draw on Manski's finding that, while categorical questions do not identify the probability of an event occurring, they do provide information on probability bounds. I analyze data from two well-known surveys, showing that, although the bounds are often wide, for some measures they move closely with the series they are intended to track or predict.

Suggested Citation

  • Martha Starr-McCluer, 1999. "The measurement of consumer expectations using survey data," Finance and Economics Discussion Series 1999-17, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:1999-17
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    References listed on IDEAS

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    1. Christopher D. Carroll, 1992. "The Buffer-Stock Theory of Saving: Some Macroeconomic Evidence," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(2), pages 61-156.
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    Cited by:

    1. Vuchelen, Jef, 2004. "Consumer sentiment and macroeconomic forecasts," Journal of Economic Psychology, Elsevier, vol. 25(4), pages 493-506, August.

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