Measuring uncertainty based on rounding: New method and application to inflation expectations

• 成果类型: Article
• 署名作者: Binder, Carola C.
• 署名单位: Haverford College
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2017.06.001
• 发表日期: 2017
• 页码: 1-12
• 关键词: uncertainty; inflation; consumption; Consumer durables; expectations; Surveys

摘要

The literature on cognition and communication documents that people use round numbers to convey uncertainty. This paper introduces a method of quantifying the uncertainty associated with round responses in pre-existing survey data. I construct micro-level and time series measures of inflation uncertainty since 1978. Inflation uncertainty is countercyclical and correlated with inflation disagreement, volatility, and the Economic Policy Uncertainty index. Inflation uncertainty is lowest among high-income consumers, college graduates, males, and stock market investors. More uncertain consumers are more reluctant to spend on durables, cars, and homes. Round responses are common on many surveys, suggesting numerous applications of this method. (C) 2017 Elsevier B.V. All rights reserved.