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Context effects in inflation surveys: The influence of additional information and prior questions

Niu, X; Harvey, N; (2021) Context effects in inflation surveys: The influence of additional information and prior questions. International Journal of Forecasting 10.1016/j.ijforecast.2021.07.009. (In press).

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Abstract

Context effects are known to affect responses to surveys. We report effects of information and task contexts in surveys of inflation expectations. Information context refers to contextual information about earlier inflation rates or other economic indicators. Task context refers to judgement tasks performed prior to the inflation judgement task under consideration. In three experiments, we show that contextual information improves judgement accuracy. As this information is given in expert, but not in lay surveys, its provision may partly explain why expert judgements are superior to those of lay people. In both expert and lay surveys, respondents make inflation judgements in the context of already having made other inflation judgements. We show that when different groups of people make inflation judgements either for the current or for the upcoming year, their judgements do not differ. However, when the same people make judgements for both the current and the upcoming years, the latter are significantly higher than the former, perhaps because people expect inflation to increase over time.

Type: Article
Title: Context effects in inflation surveys: The influence of additional information and prior questions
DOI: 10.1016/j.ijforecast.2021.07.009
Publisher version: https://doi.org/10.1016/j.ijforecast.2021.07.009
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Inflation surveys, Inflation expectations, Context effects, Information context, Task context
UCL classification: UCL
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences > Faculty of Brain Sciences
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences > Faculty of Brain Sciences > Div of Psychology and Lang Sciences
UCL > Provost and Vice Provost Offices > School of Life and Medical Sciences > Faculty of Brain Sciences > Div of Psychology and Lang Sciences > Experimental Psychology
URI: https://discovery.ucl.ac.uk/id/eprint/10135198
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