(Mis)measuring Uncertainty: Bunching in Probabilistic Expectations

Carola Binder, Laura Crespo, Carlos Gento, Luis Guirola and Ernesto Villanueva

No 35733, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Probabilistic expectation questions are often used to measure subjective uncertainty, but respondents frequently assign all probability to one outcome. We show that this bunching is partly a survey artifact rather than genuine certainty. In the (online) ECB Consumer Expectations Survey and the (in person) Spanish Survey of Household Finances, bunching is higher among less financially literate respondents and increases with panel tenure. Two survey-design changes provide stronger evidence: enforcing neutral interviewer protocols reduces bunching by about 15 percentage points, and a later questionnaire redesign reduces it by a further 18 percentage points. Interviewer-level variation also falls after standardization. These findings imply that degenerate responses in probabilistic expectations can reflect task burden and survey administration, causing standard measures to overstate certainty and understate uncertainty.

JEL-codes: C83 D84 E03 E31 E58 (search for similar items in EconPapers)
Date: 2026-09
Note: ME
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