12 de junio, Carlos Yévenes, Usach

Paper: Does Bias in Reporting Imply Bias in Behavior?»

Expositor: Carlos Yévenes, Usach
Fecha: Miércoles 12 de junio de 2019
Hora: 13:00 horas a 14:00 horas.
Lugar: Avda. Santa Clara N° 797,
Campus Ciudad Empresarial,
Sala C-302 – Edificio Cubo

Abstract

We examine the relationship between consumption growth, agents’ self-reported layoff probabilities and effective layoff rates for evidence of bias in behavior. Agents’ reports about the probability of a job loss differ substantially from the true layoff chance and this paper studies to what extent those reports can explain variation in consumption growth for individuals with similar objective probabilities. if agents with comparable layoff rates behave similarly no matter what they report about a future job loss, it would provide evidence in favor of what we call the unbiased hypothesis in behavior. On the contrary, if individuals whose layoff rates are similar but who differ regarding their reported probabilities behave differently, it would suggest the existence of bias in behavior.  The econometric model uses reported layoff probabilities elicited in the Health and Retirement Study (HRS) as an indicator variable of beliefs and rational expectation probabilities. The estimates are consistent with evidence against the rational expectations hypothesis in behavior.