Using Expectations Data to Study Subjective Income Expectations

Using Subjective Income Expectations to Test for Excess Sensitivity of Consumption to Predicted Income Growth

We test for precautionary saving and excess sensitivity of consumption to predicted income growth using a 1989-93 panel survey of Italian households that has measures of subjective income and inflation expectations. These expectations provide a powerful instrument for predicting income growth. The empirical specification controls for predictable changes in labor supply and allows a fairly gener...

Measuring Revisions to Subjective Expectations

This paper develops a new metric to measure revisions to subjective expectations and proposes a survey design strategy that enables the estimation of the metric. As an application, I analyze how women update their expectations about the e¤ectiveness of contraception methods. The women interviewed exhibit substantial heterogeneity in the way they revise their expectations with receipt of the sam...

Using Subjective Expectations Data to Allow for Unobserved Heterogeneity in Hotz-Miller Estimation Strategies

We introduce a novel approach to allow for unobserved heterogeneity in two-step structural estimation strategies for discrete choice dynamic programming models (i.e strategies that avoid full solution methods). We contribute to the literature by adopting a …xed e¤ects approach: rather than identifying an unobserved heterogeneity distribution, we actually reveal the true unobserved type of each ...

Occupational Choice in Rural Kenya: Using Subjective Expectations Data to Measure Credit and Insurance Constraints∗

Millions of people living in rural areas of Sub-Saharan Africa supplement earnings from subsistence farming by operating microenterprises or by working as day laborers. However, little is known about how people choose which of these additional incomegenerating activities to do, and, in particular, to what extent market imperfections affect this choice and contribute to inefficiencies in product...

Prior Expectations Shape Subjective Perceptual Confidence