Assessing reliability of aggregated inflation views in the European Commission consumer survey

Arbeitspapier

Using a novel approach based on micro-level survey responses, we assess the reliability of aggregated inflation expectations estimates in the European Commission Consumer Survey. We identify the share of consumers, whose qualitative and quantitative views on expected increase of prices do not match each other. Then we consider the impact of inconsistent survey responses on balance statistics and mean values of quantitative inflation expectations. We also analyze expectations' formation estimating the sticky-information models. The results, based on Finnish and Polish data, suggest that even if the fraction of inconsistent survey responses is non-negligible, it matters neither for the aggregated figures of inflation views, nor for understanding of the formation of inflation expectations by consumers. We conclude that micro-level inconsistencies do not reduce the reliability of the current EC Consumer Survey dataset. Our results also indicate that inconsistent responses are not important drivers of the inflation overestimation bias displayed in the data.

Object Details

• ISBN: 978-952-323-277-8
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bank of Finland Research Discussion Papers ; No. 10/2019

Classification and Topics

• Classification: Wirtschaft ; Bayesian Analysis: General ; Forecasting Models; Simulation Methods ; Energy and the Macroeconomy ; Energy Forecasting

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Stanisławska, Ewa ; Paloviita, Maritta ; Łyziak, Tomasz
• Event: Veröffentlichung
• (who): Bank of Finland
• (where): Helsinki
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/212444
• Last update: 10.03.2025, 11:46 AM CET