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Have You Heard the News? How Real-Life Expectations React to Publicity

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  • van der Wiel, Karen

    () (CPB Netherlands Bureau for Economic Policy Analysis)

Abstract

As evidence is accumulating that subjective expectations influence behavior and that these expectations are sometimes biased, it becomes policy-relevant to know how to influence individuals' expectations. Information in the media is likely to affect how people picture the future. This paper studies the role of public information dissemination, or publicity, in a real-life expectations formation process. For this purpose, an exceptional Dutch dataset on monthly expectations regarding the future eligibility age for old age social security is analyzed. On average, the publicity reaction in eligibility age expectations is small but the differences among subgroups are considerable. I find that higher educated and high income groups hardly adapt their expectations to relevant publicity. On the contrary, those who do not often read a newspaper have a relatively high publicity reaction. A potential explanation for this latter finding is that these groups have low quality initial expectations. If this is true, publicity thus particularly benefits the initially worse informed groups.

Suggested Citation

  • van der Wiel, Karen, 2009. "Have You Heard the News? How Real-Life Expectations React to Publicity," IZA Discussion Papers 4064, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4064
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    References listed on IDEAS

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    1. William A. Branch, 2004. "The Theory of Rationally Heterogeneous Expectations: Evidence from Survey Data on Inflation Expectations," Economic Journal, Royal Economic Society, vol. 114(497), pages 592-621, July.
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    Cited by:

    1. van der Wiel, K.M., 2009. "Essays on expectations, power and social security," Other publications TiSEM 6dd265da-685e-4b0e-b38a-0, Tilburg University, School of Economics and Management.
    2. Andries de Grip & Didier Fouarge & Raymond Montizaan, 2013. "How Sensitive are Individual Retirement Expectations to Raising the Retirement Age?," De Economist, Springer, vol. 161(3), pages 225-251, September.
    3. repec:kap:pubcho:v:173:y:2017:i:1:d:10.1007_s11127-017-0447-7 is not listed on IDEAS
    4. Luc Bissonnette & Arthur van Soest, 2012. "The future of retirement and the pension system: How the public’s expectations vary over time and across socio-economic groups," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-21, December.

    More about this item

    Keywords

    expectations; information; media;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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