Inflation expectations of households and the upgrading channel

• 成果类型: Article
• 署名作者: Agarwal, Sumit; Chua, Yeow Hwee; Song, Changcheng
• 署名单位: National University of Singapore; Nanyang Technological University; Singapore Management University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2022.04.003
• 发表日期: 2022
• 页码: 124-138
• 关键词: Inflation expectations; Consumption upgrading; Product Replacement; Survey experiment

摘要

Motivated by direct evidence that households tend to purchase higher quality goods over time (consumption upgrading), we use a survey experiment to study the relationship between consumption upgrading and households' beliefs about inflation. We find that providing price information on better-quality products will lead to higher inflation expectations. The effects on inflation expectations are smaller when price information on both higher- and lower-quality products is made available, suggesting that product replacement increases inflation expectations. Additional tests show that our results are not driven by mixing price with quality or numeracy. Our findings highlight the relationship between product replacement, product variety, and inflation expectations. (C) 2022 Elsevier B.V. All rights reserved.