Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/33234
Authors: 
Ramos, Xavier
Schluter, Christian
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers 1950
Abstract: 
In the context of income dynamics, we investigate whether aspects of agents' superior information relative to the econometrician's limited information are captured in subjective expectations data. It is natural, for instance, to assume that the econometrician cannot observe idiosyncratic shocks to both permanent and transitory components of income. In this case perceptions of risk differ between agents and the econometrician. Our tests are based on panel data elicited yearly from British households. We find evidence of superior information consistent with standard income modelling.
Subjects: 
subjective expectation reports
income risk
limited information variances
JEL: 
D12
D31
D84
Document Type: 
Working Paper

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