Evaluating the Link between Consumers' Savings Portfolio Decisions, their Inflation Expectations and Economic News
Eva Arnold (),
Lena DrÃ¤ger () and
Ulrich Fritsche ()
Additional contact information
Eva Arnold: UniversitÃ¤t Hamburg (University of Hamburg)
Lena DrÃ¤ger: UniversitÃ¤t Hamburg (University of Hamburg)
Authors registered in the RePEc Author Service: Lena Dräger ()
No 201402, Macroeconomics and Finance Series from University of Hamburg, Department of Socioeconomics
Utilizing the microdata from a first cross-section of a new household survey at the University of Hamburg, we analyse if consumers respond to their own inflation expectations and economic news that they have observed recently when they plan to adjust their savings portfolio in the next year. We extract three factors to control for consumers' socio-demographic and personality characteristics. Our estimates from the socio-demographic factors suggest that high education and personal income matter most for a planned savings portfolio adjustment. Interestingly, higher inflation expectations only affect planned savings adjustments due to higher interest rates, suggesting that consumers have a Taylor-rule-type relation in mind. Disentangling the effects of economic news, we find that news on higher inflation lead consumers to consider protection against inflation, safety of the portfolio and higher interest rates as reasons for a savings adjustment. In addition positive news on the business cycle and on the Euro crisis increase the likelihood that consumers consider a savings adjustment to protect against inflation or due to higher expected interest rates, respectively. Overall, it seems that economic news observed are incorporated into decisions regarding a planned savings portfolio adjustment, while inflation expectations play an indirect role.
Keywords: Consumers' savings adjustment; inflation expectations; economic news; survey microdata (search for similar items in EconPapers)
JEL-codes: C21 D14 D84 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://www.wiso.uni-hamburg.de/repec/hepdoc/macppr_2_2014.pdf First version, 2014 (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hep:macppr:201402
Access Statistics for this paper
More papers in Macroeconomics and Finance Series from University of Hamburg, Department of Socioeconomics Contact information at EDIRC.
Bibliographic data for series maintained by Ulrich Fritsche ().