Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/207640
Authors: 
Krüger, Fabian
Pavlova, Lora
Year of Publication: 
2019
Series/Report no.: 
Discussion Paper Series 664
Abstract: 
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.
Subjects: 
uncertainty
inflation
economic expectations
probabilistic forecasting
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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