TY  - UNPD
A1  - Massenot, Baptiste
A1  - Pettinicchi, Yuri
T1  - Can households see into the future? survey evidence from the Netherlands
T2  - SAFE working paper series ; No. 233
N2  - This paper presents new evidence on the expectation formation process from a Dutch household survey. Households become too optimistic about their future income after their income has improved, consistent with the over-extrapolation of their experience. We show that this effect of experience is persistent and that households over-extrapolate income losses more than income gains. Furthermore, older households over-extrapolate more, suggesting that they did not learn over time to form more accurate expectations. Finally, we study the relationship between expectation errors and consumption. We find that more over-optimistic households intend to consume more and subsequently report higher consumption, even though they do not consume as much as they intended to. These results suggests that overextrapolation hurts consumers and amplify business cycles.
T3  - SAFE working paper - 233 
Y1  - 2018
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/48379
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-483793
UR  - https://ssrn.com/abstract=3276064
IS  - July 14, 2018
PB  - SAFE
CY  - Frankfurt am Main
ER  -