Measuring inflation expectations: how the response scale shapes density forecasts
In density forecasts, respondents are asked to assign probabilities to pre-specifted ranges of inflation. We show in two large-scale experiments that responses vary when we modify the response scale. Asking an identical question with modifted response scales induces different answers: Shifting, comp...
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| Main Authors: | , , |
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| Format: | Book/Monograph Working Paper |
| Language: | English |
| Published: |
Heidelberg
Heidelberg University, Department of Economics
13 Jan. 2023
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| Series: | AWI discussion paper series
no. 723 (January 2023) |
| In: |
AWI discussion paper series (no. 723 (January 2023))
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| DOI: | 10.11588/heidok.00032677 |
| Subjects: | |
| Online Access: | Verlag, kostenfrei: http://archiv.ub.uni-heidelberg.de/volltextserver/32677/1/Becker_Duersch_Eife_2023_dp723.pdf Resolving-System, kostenfrei: https://doi.org/10.11588/heidok.00032677 Resolving-System, kostenfrei: https://nbn-resolving.org/urn:nbn:de:bsz:16-heidok-326775 Langzeitarchivierung Nationalbibliothek, kostenfrei: https://d-nb.info/1278155716/34 Verlag, kostenfrei: http://www.ub.uni-heidelberg.de/archiv/32677 Resolving-System, kostenfrei: https://hdl.handle.net/10419/278301 
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| Author Notes: | Christoph Becker, Peter Duersch, Thomas Eife |
| Summary: | In density forecasts, respondents are asked to assign probabilities to pre-specifted ranges of inflation. We show in two large-scale experiments that responses vary when we modify the response scale. Asking an identical question with modifted response scales induces different answers: Shifting, compressing or expanding the scale leads to shifted, compressed and expanded forecasts. Mean forecast, uncertainty, and disagreement can change by several percentage points. We discuss implications for survey design and how central banks can adjust the response scales during times of high inflation. |
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| Physical Description: | Online Resource |
| DOI: | 10.11588/heidok.00032677 |