Expectations Uncertainty and Household Economic Behavior

Itzhak Ben-David, Elyas Fermand, Camelia Kuhnen and Geng Li
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Elyas Fermand: University of North Carolina (UNC) at Chapel Hill - Finance Area

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: We show that there exists significant heterogeneity across US households in how uncertain they are in their expectations regarding personal and macroeconomic outcomes, and that uncertainty in expectations predicts households' choices. Individuals with lower income or education, more precarious finances, and living in counties with higher unemployment are more uncertain in their expectations regarding own-income growth, inflation, and national home price changes. People with more uncertain expectations, even accounting for their socioeconomic characteristics, exhibit more precaution in their consumption, credit, and investment behaviors.

JEL-codes: D14 D83 D84 G02 G11 (search for similar items in EconPapers)
Date: 2018-11
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Citations: View citations in EconPapers (50)

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Working Paper: Expectations Uncertainty and Household Economic Behavior (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2018-25

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