What Do Consumers Believe About Future Gasoline Prices? / Soren T. Anderson, Ryan Kellogg, James M. Sallee.

Format:

Book

Author/Creator:

Anderson, Soren T.

Contributor:

National Bureau of Economic Research.

Kellogg, Ryan.

Sallee, James M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w16974.

NBER working paper series no. w16974

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2011.

Summary:

A full understanding of how gasoline prices affect consumer behavior frequently requires information on how consumers forecast future gasoline prices. We provide the first evidence on the nature of these forecasts by analyzing two decades of data on gasoline price expectations from the Michigan Survey of Consumers. We find that average consumer beliefs are typically indistinguishable from a no-change forecast, justifying an assumption commonly made in the literature on consumer valuation of energy efficiency. We also provide evidence on circumstances in which consumer forecasts are likely to deviate from no-change and on significant cross-consumer forecast heterogeneity.

Notes:

Print version record

April 2011.