Subjective Income Expectations, Canonical Models and Income Risk

• Autores: Christian Schluter, Xavier Ramos
• Localización: Working papers (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada), Nº. 10, 2003
• Idioma: inglés
• Enlaces
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• Resumen

  • Expectations are central to behaviour. Despite the existence of subjective expectations data, the standard approach is to ignore these, to hypothecate a model of behaviour and to infer expectations from realisations. In the context of income models, we reveal the informational gain obtained from using both a canonical model and subjective expectations data. We propose a test for this informational gain, and illustrate our approach with an application to the problem of measuring income risk.