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Brown, S. orcid.org/0000-0002-4853-9115, Mark, N.H., Spencer, C. et al. (1 more author) (2024) Financial expectations and household consumption: does middle-inflation matter? Journal of Money, Credit and Banking, 56 (4). pp. 741-768. ISSN 0022-2879
Abstract
We explore the finding that households often expect their financial position to remain unchanged compared to other alternatives. A generalized middle inflated ordered probit (GMIOP) model is used to account for the tendency of individuals to choose “neutral” responses when faced with opinion-based questions. Our analysis supports the use of a GMIOP model to account for this response pattern. Expectation indices based on competing discrete choice models are also explored. While financial optimism is significantly associated with increased consumption at both the intensive and extensive margin, indices which fail to take into account middle-inflation overestimate the impact of financial expectations.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2023 The Authors. Journal of Money, Credit and Banking published by Wiley Periodicals LLC on behalf of Ohio State University. This is an open access article under the terms of the Creative Commons Attribution License, (http://creativecommons.org/licenses/by/4.0/) which permits use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | Financial expectations; generalised middle-inflated ordered probit model; household consumption; survey data |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 29 Mar 2023 14:48 |
Last Modified: | 10 Jun 2024 14:19 |
Status: | Published |
Publisher: | Wiley |
Refereed: | Yes |
Identification Number: | 10.1111/jmcb.13063 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:197642 |
Available Versions of this Item
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Financial expectations and household consumption: does middle inflation matter? (deposited 05 Apr 2023 15:52)
- Financial expectations and household consumption: does middle-inflation matter? (deposited 29 Mar 2023 14:48) [Currently Displayed]