Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283596 
Year of Publication: 
2023
Series/Report no.: 
ZEW Discussion Papers No. 23-072
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
Central bank surveys frequently elicit households' probabilistic beliefs about future inflation. However, most household surveys use a response scale that is tailored towards low-inflation regimes. Using data from a randomized controlled trial included in the Bundesbank Online Panel Households, we show (i) that keeping the original scale in high-inflation regimes distorts estimates of histogram moments and forces households to provide probabilistic expectations that are inconsistent with the point forecasts and (ii) how shifting the scale improves the consistency of predictions by allowing respondents to state more detailed beliefs about higher inflation ranges. We also explore potential disadvantages of adjusting the response scale.
Subjects: 
Probabilistic expectations
inflation
survey data
JEL: 
D84
E31
E58
Document Type: 
Working Paper

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