Evidence on Expectations of Household Finances

• 成果类型: Article; Early Access
• 署名作者: Cocco, Joao F.; Gomes, Francisco; Lopes, Paula
• 署名单位: University of London; London Business School; Centre for Economic Policy Research - UK; University of London; London School Economics & Political Science; Tilburg University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.03257
• 发表日期: 2025
• 关键词: Household finance; household expectations; expectation errors; learning; LIFE EVENTS

摘要

We use panel data on expected and realized changes in household finances to study the process of expectation formation. Households extrapolate from improvements in financial situation, but deteriorations are associated with an increased dispersion of forecasts, and higher probabilities of both negative and positive forecast errors. Individuals who expect earnings declines to revert too quickly save less and are more likely to be financially worse off again in the future. Learning from past errors reduces the likelihood that individuals are optimistic following a deterioration in their finances. The evidence shows how experiences, learning, and life events matter for expectation formation.