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Studies in Nonlinear Dynamics & Econometrics

Ed. by Mizrach, Bruce

5 Issues per year


IMPACT FACTOR 2017: 0.855

CiteScore 2017: 0.76

SCImago Journal Rank (SJR) 2017: 0.668
Source Normalized Impact per Paper (SNIP) 2017: 0.894

Mathematical Citation Quotient (MCQ) 2017: 0.02

Online
ISSN
1558-3708
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Volume 16, Issue 4

Issues

Identification of Interaction Effects in Survey Expectations: A Cautionary Note

Simone Alfarano / Mishael Milakovic
Published Online: 2012-10-16 | DOI: https://doi.org/10.1515/1558-3708.1909

Abstract

A growing body of literature reports evidence of social interaction effects in survey expectations. In this note, we argue that evidence in favor of social interaction effects should be treated with caution, or could even be spurious. Utilizing a parsimonious stochastic model of expectation formation and dynamics, we show that the existing sample sizes of survey expectations are about two orders of magnitude too small to reasonably distinguish between noise and interaction effects. Moreover, we argue that the problem is compounded by the fact that highly correlated responses among agents might not be caused by interaction effects at all, but instead by model-consistent beliefs. Ultimately, these results suggest that existing survey data cannot facilitate our understanding of the process of expectations formation.

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Published Online: 2012-10-16


Citation Information: Studies in Nonlinear Dynamics & Econometrics, Volume 16, Issue 4, ISSN (Online) 1558-3708, DOI: https://doi.org/10.1515/1558-3708.1909.

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©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston.Get Permission

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