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Krüger, Fabian
Pavlova, Lora
Year of Publication: 
Series/Report no.: 
Discussion Paper Series 664
Several recent surveys ask for a person's subjective probabilities that the in- ation rate falls into various outcome ranges. We provide a new measure of the uncertainty implicit in such probabilities. The measure has several advantages over existing methods: It is trivial to implement, requires no functional form assumptions, and is well-defined for all logically possible probabilities. From a theoretical viewpoint, the measure can be motivated as the entropy function of a strictly proper scoring rule. We demonstrate the measure's good performance in a simulation study based on empirical data from the Survey of Consumer Expectations.
economic expectations
probabilistic forecasting
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Document Type: 
Working Paper

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