Does repeated cross-section data help explain consumer inflation expectations revisions?

Harold Glenn A. Valera (), Cymon Kayle Lubangco () and Mark J. Holmes ()
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Harold Glenn A. Valera: BSP Research Academy, Bangko Sentral ng Pilipinas
Cymon Kayle Lubangco: Bangko Sentral ng Pilipinas
Mark J. Holmes: University of Waikato, https://www.waikato.ac.nz/about/faculties-schools/management/

Working Papers in Economics from University of Waikato

Abstract: We propose a new measure of revisions to consumer inflation expectations using repeated cross-sections rather than requiring panel data. We calculate the value of group average expectations in a prior period as a proxy for what an individual’s expectations might have been using micro data in the Philippines for Q1 2010 to Q2 2024. In contrast to existing mixed evidence, the resulting revisions show sensitivity to price changes in 14 food and energy goods. The equivalence testing finds that the group-based coefficients are valid, as they are: (a) different from an overall sample average-based revision results with Philippine data, and (b) similar to rotating panel-based revision results using data from the Michigan Survey of U.S. households. Using Philippine data, we also provide new evidence of significant effects of a firm’s frequency of price changes on expectation revisions.

Keywords: inflation expectations; forecast revision; repeated cross-section; rotating panel; food and energy prices; equivalence testing; rational inattention; sticky information (search for similar items in EconPapers)
JEL-codes: C53 D84 E31 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2026-02-19
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