Gresham's Law of Model Averaging Cho, In-Koo; Kasa, Kenneth
The American economic review,
11/2017, Letnik:
107, Številka:
11
Journal Article
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A decision maker doubts the stationarity of his environment. In response, he uses two models, one with time-varying parameters, and another with constant parameters. Forecasts are then based on a ...Bayesian model averaging strategy, which mixes forecasts from the two models. In reality, structural parameters are constant, but the {unknown) true model features expectational feedback, which the reduced-form models neglect. This feedback permits fears of parameter instability to become self-confirming. Within the context of a standard asset-pricing model, we use the tools of large deviations theory to show that even though the constant parameter model would converge to the rational expectations equilibrium if considered in isolation, the mere presence of an unstable alternative drives it out of consideration.
Consumers rely on the price changes of goods in their grocery bundles when forming expectations about aggregate inflation. We use micro data that uniquely match individual expectations, detailed ...information about consumption bundles, and item-level prices. The weights consumers assign to price changes depend on the frequency of purchase, rather than expenditure share, and positive price changes loom larger than negative price changes. Prices of goods offered in the same store but not purchased do not affect inflation expectations, nor do other dimensions. Our results provide empirical guidance for models of expectations formation with heterogeneous consumers.
Using the exact wording of the European Central Bank's definition of price stability, we started a representative online survey of German citizens in January 2019 that is designed to measure ...long‐term inflation expectations and the credibility of the inflation target. Our results indicate that credibility has decreased in our sample period, particularly in the course of the deep recession implied by the Covid‐19 pandemic. Interestingly, even though inflation rates in Germany have been clearly below 2% for several years, credibility has declined mainly because Germans increasingly expect that inflation will be much higher than 2% over the medium term. We investigate how inflation expectations and the impact of the pandemic depend on personal characteristics including age, gender, education, and political attitude.
Increasingly, researchers have come to acknowledge that consumption activities entail both utilitarian and hedonic components. Whereas utilitarian consumption accentuates the achievement of ...predetermined outcomes typical of cognitive consumer behavior, its hedonic counterpart relates to affective consumer behavior in dealing with the emotive and multisensory aspects of the shopping experience. Consequently, while utilitarian consumption activities appeal to the rationality of customers in inducing their intellectual buy-in of the shopping experience, customers’ corresponding emotional buy-in can only be attained through the presence of hedonic consumption activities. The same can be said for online shopping. Because the online shopping environment is characterized by the existence of an IT-enabled web interface that acts as the focal point of contact between customers and vendors, its design should embed utilitarian and hedonic elements to create a holistic shopping experience. Building on Expectation Disconfirmation Theory (EDT), this study advances a research model that not only delineates between customers’ utilitarian and hedonic expectations for online shopping but also highlights how these expectations can be best served through functional and esthetic performance, respectively. Furthermore, we introduce online shopping experience (i.e., transactional frequency) as a moderator affecting not only how customers form utilitarian and hedonic expectations but also how they evaluate the functional and esthetic performances of e-commerce sites. The model is then empirically validated via an online survey questionnaire administered on a sample of 303 respondents. Theoretical contributions and pragmatic implications to be gleaned from our research model and its subsequent empirical validation are discussed.
The Student Expectations of Learning Analytics Questionnaire Whitelock‐Wainwright, Alexander; Gašević, Dragan; Tejeiro, Ricardo ...
Journal of computer assisted learning,
October 2019, 2019-10-00, 20191001, Letnik:
35, Številka:
5
Journal Article
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Student engagement within the development of learning analytics services in Higher Education is an important challenge to address. Despite calls for greater inclusion of stakeholders, there still ...remains only a small number of investigations into students’ beliefs and expectations towards learning analytics services. Therefore, this paper presents a descriptive instrument to measure student expectations (ideal and predicted) of learning analytics services. The scales used in the instrument are grounded in a theoretical framework of expectations, specifically ideal and predicted expectations. Items were then generated on the basis of four identified themes (Ethical and Privacy Expectations, Agency Expectations, Intervention Expectations, and Meaningfulness Expectations), which emerged after a review of the learning analytics literature. The results of an exploratory factor analysis and the results from both an exploratory structural equation model and confirmatory factor analysis supported a two‐factor structure best accounted for the data pertaining to ideal and predicted expectations. Factor one refers to Ethical and Privacy Expectations, whilst factor two covers Service Feature Expectations. The 12‐item Student Expectations of Learning Analytics Questionnaire (SELAQ) provides researchers and practitioners with a means of measuring of students’ expectations of learning analytics services.
Lay Description
What is already known about this topic:
Understanding student expectations of learning analytics is an important challenge for higher education institutions to address.
Research has measured student beliefs regarding the features and ethical procedures of a learning analytics service.
What this paper adds:
This study builds on prior work by developing an instrument to measure student expectations of learning analytics services.
This study proposes that student expectations of learning analytics can be measured using two subscales: (a) ethical and privacy expectations and (b) service expectations.
Implications for practice and/or policy:
Higher education institutions should understand what students expect from learning analytics services before any implementations are actioned.
Higher education institutions have a validated instrument to gauge and understand student expectations of learning analytics services.
Results obtained from the instrument can be used to inform the development of specific learning analytics policies for each higher education institution.
LEARNING FROM INFLATION EXPERIENCES Malmendier, Ulrike; Nagel, Stefan
The Quarterly journal of economics,
02/2016, Letnik:
131, Številka:
1
Journal Article
Recenzirano
How do individuals form expectations about future inflation? We propose that individuals overweight inflation experienced during their lifetimes. This approach modifies existing adaptive learning ...models to allow for age-dependent updating of expectations in response to inflation surprises. Young individuals update their expectations more strongly than older individuals since recent experiences account for a greater share of their accumulated lifetime history. We find support for these predictions using 57 years of microdata on inflation expectations from the Reuters/Michigan Survey of Consumers. Differences in experiences strongly predict differences in expectations, including the substantial disagreement between young and old individuals in periods of highly volatile inflation, such as the 1970s. It also explains household borrowing and lending behavior, including the choice of mortgages.
We introduce diagnostic expectations into a standard setting of price formation in which investors learn about the fundamental value of an asset and trade it. We study the interaction of diagnostic ...expectations with learning from prices and speculation (buying for resale). With diagnostic (but not with rational) expectations, these mechanisms lead to price paths exhibiting three phases: initial underreaction, then overshooting (the bubble), and finally a crash. With learning from prices, the model generates price extrapolation as a by-product of beliefs about fundamentals, lasting only as the bubble builds up. When investors speculate, even mild diagnostic distortions generate substantial bubbles.
•Teachers (Ts) are an important source of information for disadvantaged students.•Student fixed-effect estimates show biases in Ts’ expectations for students.•Student–teacher racial mismatch reduces ...Ts’ expectations for black students.•Black Ts’ expectations for black students are 30–40% higher than non-black Ts’.•Effects are larger for black male students than for black female students.
Teachers are an important source of information for traditionally disadvantaged students. However, little is known about how teachers form expectations and whether they are systematically biased. We investigate whether student–teacher demographic mismatch affects high school teachers’ expectations for students’ educational attainment. Using a student fixed effects strategy that exploits expectations data from two teachers per student, we find that non-black teachers of black students have significantly lower expectations than do black teachers. These effects are larger for black male students and math teachers. Our findings add to a growing literature on the role of limited information in perpetuating educational attainment gaps.
There is a widespread belief that changes in expectations may be an important independent driver of economic fluctuations. The news view of business cycles offers a formalization of this perspective. ...In this paper we discuss mechanisms by which changes in agents' information, due to the arrival of news, can cause business cycle fluctuations driven by expectational change, and we review the empirical evidence aimed at evaluating their relevance. In particular, we highlight how the literature on news and business cycles offers a coherent way of thinking about aggregate fluctuations, while at the same time we emphasize the many challenges that must be addressed before a proper assessment of the role of news in business cycles can be established.
This paper applies a N-ARDL framework to two longstanding inflation targeting policy regimes in order to assess the relation between oil prices dynamics and inflation expectations and the further ...consequences created by a proximal ZLB situation. The application is based on data from January 1994 to June 2018 for New Zealand and the UK. We focus on oil price shocks as a variable of interest and this was found to have an asymmetric effect on inflation expectations. One further key finding is that the real effective exchange rate has significant impacts on inflation expectations and this is indicative of an exchange rate pass-through to inflation via an inflation expectations channel. In general, we find that inflation, exchange rate, money supply, output growth, unemployment and fiscal deficit/surplus have significant implications for inflation expectations. Inflation expectations are also influenced by their past behaviour indicating adaptive inflation expectations. This study contributes to the debate on the inflation targeting at ZLB.
•Nexus between inflation and inflation expectations and consequences created by a proximal Zero Lower Bound (ZLB).•Oil shocks have an asymmetric effect on inflation expectations in the UK and New Zealand.•Significant impact of the output gap, labour market slack, fiscal stance, real effective exchange rate, money supply and cost (oil) shocks on inflation expectations.•Asymmetries in the response of inflation expectations in the Pre- and Post-ZLB periods as well as between the NZ and UK•Significant impact of real effective exchange rate on inflation expectations and evidence of exchange rate pass-through to inflation via an inflation expectations channel•Strong and significant evidence of persistence in inflation expectations in Pre & Post ZLB regimes.
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