Quantifying subjective uncertainty in survey expectations

Fabian Krüger and Lora Pavlova

International Journal of Forecasting, 2024, vol. 40, issue 2, 796-810

Abstract: An increasing number of household and firm surveys ask for subjective probabilities that the inflation rate falls into various outcome ranges. We provide a new measure of the uncertainty implicit in such probabilities. The measure has several advantages over existing methods: It is robust, trivial to implement, requires no functional form assumptions, and is well-defined for all logically possible probabilities. These advantages are particularly relevant when analyzing microdata from extensive consumer surveys. We illustrate the new measure using data from the Survey of Consumer Expectations.

Keywords: Survey expectations; Uncertainty; Forecasting; Proper scoring rules; Macroeconomics (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfor:v:40:y:2024:i:2:p:796-810

DOI: 10.1016/j.ijforecast.2023.06.001

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