Framing effects in consumer expectations surveys


Pavlova, Lora


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URN: urn:nbn:de:bsz:180-madoc-676602
Document Type: Working paper
Year of publication: 2024
The title of a journal, publication series: ZEW Discussion Papers
Volume: 24-036
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: C83 , D84 , E31,
Keywords (English): probabilistic expectations , survey design , household inflation expectations
Abstract: In a randomized experiment embedded in a survey, I test the effects of variations in question wording and format on consumer response behavior and the corresponding inflation expectations. To this end, survey participants from a representative sample of German consumers are broken down into four treatment groups and presented with different versions of a question asking for their subjective distribution for inflation over the next 12 months. As part of the experiment, two competing wordings, previously known from leading consumer surveys, are considered: (i) the change in prices in general or (ii) the inflation rate. In addition, I compare the responses to a question asking for consumers’ probabilistic beliefs about future inflation, to those from a simpler one asking for the expected minimum, maximum, and most likely inflation rate over the short term. I find that response behavior varies strongly with framing. Simpler wording such as ‘prices in general’ and a less restrictive format lead to higher mean expected inflation, on average. While simpler wording increases individual uncertainty derived from the subjective histograms, asking for minimum, maximum and mode leads to lower uncertainty about expected inflation.




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