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Inflation illiteracy - a micro-data analysis

Andersson, Fredrik N G LU ; Hjalmarsson, Erik and Österholm, Pär (2023) In Sveriges Riksbank Economic Review 2023(2). p.106-119
Abstract
Using micro-level survey data from the National Institute of Economic
Research’s Economic Tendency Survey, we find that a relatively large
share of Swedish households is ill-informed about the rate of inflation in
the economy, with perceived and expected rates of inflation deviating
substantially from official measures. Probit analysis of the data indicates
that such inflation illiteracy is related to respondent characteristics,
including income, education and sex. Finally, we show that the treatment
of extreme-value answers has a substantial effect on the aggregated time
series typically reported and discussed.
Abstract (Swedish)
Survey data Economic Tendency Survey Swedish households' perceptions of the current rate of inflation and their expectations of the future rate of inflation. They analyse what percentage of households can be considered to be poorly informed about inflation (as their responses devia on te significantly from the historical pattern of inflation), and what characterises these households
Please use this url to cite or link to this publication:
author
; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
inflation expectations, survey data, inflation illiteracy
in
Sveriges Riksbank Economic Review
volume
2023
issue
2
pages
106 - 119
ISSN
2001-029X
language
English
LU publication?
yes
id
be483e82-8e7a-4e43-9a54-b11fe7bc3b77
alternative location
https://www.riksbank.se/globalassets/media/rapporter/pov/engelska/2022/economic-review-2-2022.pdf
date added to LUP
2023-03-26 08:55:09
date last changed
2024-02-14 14:12:34
@article{be483e82-8e7a-4e43-9a54-b11fe7bc3b77,
  abstract     = {{Using micro-level survey data from the National Institute of Economic<br/>Research’s Economic Tendency Survey, we find that a relatively large<br/>share of Swedish households is ill-informed about the rate of inflation in<br/>the economy, with perceived and expected rates of inflation deviating<br/>substantially from official measures. Probit analysis of the data indicates<br/>that such inflation illiteracy is related to respondent characteristics,<br/>including income, education and sex. Finally, we show that the treatment<br/>of extreme-value answers has a substantial effect on the aggregated time<br/>series typically reported and discussed.}},
  author       = {{Andersson, Fredrik N G and Hjalmarsson, Erik and Österholm, Pär}},
  issn         = {{2001-029X}},
  keywords     = {{inflation expectations; survey data; inflation illiteracy}},
  language     = {{eng}},
  month        = {{03}},
  number       = {{2}},
  pages        = {{106--119}},
  series       = {{Sveriges Riksbank Economic Review}},
  title        = {{Inflation illiteracy - a micro-data analysis}},
  url          = {{https://www.riksbank.se/globalassets/media/rapporter/pov/engelska/2022/economic-review-2-2022.pdf}},
  volume       = {{2023}},
  year         = {{2023}},
}