Subjective Expectations Research Articles

The Subjective Inflation Expectations of Households and Firms: Measurement, Determinants, and Implications

Households’ and firms’ subjective inflation expectations play a central role in macroeconomic and intertemporal microeconomic models. We discuss how subjective inflation expectations are measured, the patterns they display, their determinants, and how they shape households’ and firms’ economic choices in the data and help us make sense of the observed heterogeneous reactions to business-cycle shocks and policy interventions. We conclude by highlighting the relevant open questions and why tackling them is important for academic research and policymaking.

Intervention is a better predictor of tDCS mind-wandering effects than subjective beliefs about experimental results

Blinding in non-invasive brain stimulation research is a topic of intense debate, especially regarding the efficacy of sham-controlled methods for transcranial direct current stimulation (tDCS). A common approach to assess blinding success is the inclusion of correct guess rate. However, this method cannot provide insight into the effect of unblinding on observed stimulation outcomes. Thus, the implementation of measures to systematically evaluate subjective expectation regarding stimulation is needed. Previous work evaluated subjective effects in an earlier study which reported a mind-wandering and tDCS data set and concluded that subjective belief drove the pattern of results observed. Here we consider the subjective and objective intervention effects in a key contrast from that data set—2 mA vs. sham—which was not examined in the reanalysis. In addition, we examine another key contrast from a different tDCS mind-wandering study that employed similar methodology. Our findings support objective intervention as the strongest predictor of the observed effects of mind-wandering in both re-analyses, over and above that of subjective intervention. However, it is important to control for and understand the possible inadequacies of sham-controlled methods.

People adaptively use information to improve their internal states and external outcomes

Information can strongly impact people's affect, their level of uncertainty and their decisions. It is assumed that people seek information with the goal of improving all three. But are they successful at achieving this goal? Answering this question is important for assessing the impact of self-driven information consumption on people's well-being. Here, over five experiments (total N = 727) we show that participants accurately predict the impact of information on their internal states (e.g., affect and cognition) and external outcomes (e.g., material rewards), and use these predictions to guide information-seeking choices. A model incorporating participants' subjective expectations regarding the impact of information on their affective, cognitive, and material outcomes accounted for information-seeking choices better than a model that included only objective proxies of those measures. This model also accounted for individual differences in information-seeking choices. By balancing considerations of the impact of information on affective, cognitive and material outcomes when seeking knowledge, participants became happier, more certain and made better decisions when they sought information relative to when they did not, suggesting that the actual consequences of receiving information aligned with their subjective expectations.

“What’s in the middle”: Scratching beneath the surface of the middle class(es) in Brazil, Côte d’Ivoire, Turkey and Vietnam

The term “middle class” is increasingly used to qualify the mass of people in developing countries who are neither poor nor rich and share consumption patterns historically associated with the western middle class. However, what differentiates them from the ideal-typical middle class, as well as the extent to which emerging middle classes differ across developing countries, has only been marginally documented by economists to date. This article proposes to scratch beneath the surface of the so-called middle-class that is burgeoning in developing countries by documenting the commonalities and differences hidden by the all-encompassing term of “middle class” for a set of developing countries exhibiting different levels of income, economic structures and socio-political systems: Brazil, Côte d’Ivoire, Turkey and Vietnam. Relying on quantitative and qualitative micro-economic data, our paper compares the objective characteristics (occupation, education, income), behavior and subjective expectations of the people standing in the middle of the income distribution in the four countries. Four main research questions structure the paper. Where is the middle? How is the middle specific? Who is in the middle? What does the middle aspire to? Results show that the middle-income group in each country covers distinct realities. Although some similar characteristics and behaviors are observable, our results reveal a strong heterogeneity within each national middle class, with no fewer than four to seven socio-economic subgroups, and strong country-specific traits as most of the subgroups are deeply rooted in the country’s specific historical trajectory. In each country, our analysis also unveils a pattern of bipolarization between a rather affluent and stable middle class and a “new” or more vulnerable one. Finally, middle class members appear to be characterized by an individualist positioning and the absence of a marked political commitment, challenging the common assumption that developing countries’ middle classes are agents of political change.

Subjective life expectancy of middle-aged and older adult cancer survivors: A cross-sectional study in Korea using age-specific subgroup analysis.

As the population ages and the survival rate of cancer patients increases, long-term management of older adult cancer survivors has become important. Subjective life expectancy (SLE) is a concept that refers to an individual's particular predicted lifespan, which enables individuals to live an active life with hopeful expectations for the extension of a healthy life. Therefore, this study aims to identify the factors related to SLE according to age group, to help enable middle-aged and older adult cancer survivors to actively live out their lives with a sense of control. A descriptive, cross-sectional study was used. This study included 538 participants in the fifth to seventh survey data of the Korean Longitudinal Study of Aging dataset. Moreover, we conducted multivariable regression analyses. The participants of this study were 137 middle-aged (under 64 years), 196 young-old (65-74 years), 164 old-old (75-84 years) and 41 oldest-old (over 85 years) cancer survivors. The mean age of the participants was 71.22 ± 9.4 years. The factors related to SLE were employment status (β=7.43, p =0.018) and quality of life (QOL) (β=0.25, p=0.010) for the middle-aged group and age (β=-1.50, p=0.002) and employment status (β=10.44, p=0.003), and QOL (β=0.31, p < 0.001) in the young-old group; in the old-old group and oldest-old group, the predictors of SLE were QOL (β=0.35, p=0.004) and social network (β=2.76, p=0.018). The SLE of middle-aged and older adult cancer survivors was different by age group, and related factors also varied by it. Therefore, an individual approach for each age group is required to effectively promote SLE. By developing and applying differentiated nursing interventions suitable for each age group for middle-aged and older adult cancer survivors, it should be possible to help them make a healthy transition with positive expectations for life extension.

Effects of confronting the feared outcome during exposure therapy on the return of fear: An analogue study

Background and objectivesAlthough exposure therapy is an efficacious treatment for anxiety disorders, fear often returns after treatment. From an inhibitory learning perspective, long-term improvement depends not only on learning that feared stimuli are safe, but also that it is safe to experience the emotional response triggered by these stimuli. Accordingly, the current study examined the effects of occasional threat reinforcement during repeated exposure to multiple cues on the return of fear in snake phobia by incorporating reminders of the feared outcome. MethodsSnake fearful community adults (N = 74) were randomized to either repeated exposure to multiple cues or exposure to multiple cues that also explicitly depicted the feared outcome (snake biting someone). A measure of self-reported threat expectancy and a threat-relevant behavioral approach task (BAT) were administered pre-exposure, post-exposure, and at a one-week follow-up. ResultsCompared to the multiple-cue exposure group, the multiple-cue + fear-outcome group showed significantly less subjective expectancy for a snake to bite and increased behavioral approach of snake images at one-week follow-up. The fear-outcome group also reported significantly greater variability in distress during exposure than the multiple-cue exposure group and this difference mediated the intervention effect on behavioral approach at follow-up. LimitationsFindings are limited by the use of videos as an analogue to exposure and a computer-delivered BAT. ConclusionsThese findings suggest presentation of the feared outcome may result in more variability in distress during exposure therapy and this may partially explain the maintenance of behavioral gains.

An integrated fuzzy-grey relational analysis approach to portfolio optimization.

This paper combines two approaches (Fuzzy set theory and Grey Relational Analysis) for modelling an investor’s imprecise linguistic expectations and the uncertain returns of assets. We propose a novel maximization-type risk measure capable of incorporating the investor’s individual preferences. The investor provides the expectations of what is considered the “ideal” return from the portfolio. We use Credibility theory to capture the investors’ subjective and imprecise expectations in a precise mathematical form. We construct a portfolio return sequence using the assets’ actual return data and an ideal sequence based on investors’ preferences. Subsequently, we calculate the Grey similitude and the closeness incidence degree between the two sequences. The closer the portfolio return is to the ideal return, the better. In this manner, we develop a new risk measure that can quantify an investor’s perception of risk. This measure is intuitive and easy to calculate. It does not involve estimating many parameters, something which would increase the estimation risk. We use a genetic algorithm to solve the resulting portfolio optimization model. We illustrate this method with two case studies: (i) a case study of 100 assets of the U.S. stock market’s NASDAQ-100 index and (ii) a case study of 50 assets of the Indian stock market’s NIFTY-50 index. We comprehensively analyze the model’s out-of-sample performance and discuss its implications. The portfolios obtained using the proposed approach exhibit healthy growth outside the in-sample period. We also compare the out-of-sample performance of the proposed model with several approaches in the literature to establish its superiority.

Subjective expectations from radiotherapy and chemotherapy in patients with oncological illnesses

IntroductionExpectations and fears about chemotherapy and radiotherapy in patients with oncological illness may not only affect their subjective well-being (Shaverdian et al., 2018) but also treatment satisfaction and complaints of side effects (Guidolin et al., 2018, Dong et al., 2014, Colagiuri et al., 2013).ObjectivesThe aim was to compare beliefs about treatment in patients referred to radiation therapy and chemotherapy, and to reveal their relationship to health anxiety and subjective well-being.Methods53 patients referred to radiation therapy and 63 patients referred to chemotherapy completed the Treatment Perception in Oncological Illnesses Scale (Kovyazina et al., 2021), Illness and Treatment Self-Regulation Questionnaire (Kovyazina et al., 2019), Satisfaction with Life Scale (Diener et al., 1985) and Scale of Positive and Negative Experiences (Diener et al., 2009).ResultsCompared to radiation therapy, with chemotherapy, patients tend to be more doubtful about the effectiveness of treatment and more anxious about the need for it (p&lt;.05). Moderated mediation analysis demonstrated that lack of understanding, doubts about the effectiveness and anxiety about radiation and chemotherapy are associated with subjective ill-being indirectly - through a higher level of health anxiety (β=-.79--.35, SE=.17-.26, 95% CI [-1.42 - -.75 – -.37 - -0,08]). Feelings of helplessness regarding treatment mediated the relationship between doubts and confidence about treatment effectiveness and well-being in both groups.ConclusionsResults demonstrated that some fears and expectations about chemo- and radiotherapy could provoke health anxiety and helplessness regarding treatment that is related to poorer well-being.DisclosureNo significant relationships.

Anchors matter: Eliciting maternal expectations on educational outcomes

Subjective expectation data on education has been increasingly used by social scientists to better understand current investments in human capital. Despite its recognised value by scholars, there is little evidence about how the elicitation of such data might be sensitive to questionnaire design. Using a 2 × 2 between-subjects experimental design, we analyse how sensitive the elicitation of subjective expectation data on educational outcomes is to anchors. Our study provides causal evidence on whether collecting data on parental education before the elicitation of parental expectations on their children’s educational outcomes anchors the elicitation of the latter; and whether parental expectations on their older offsprings anchors their expectations on their younger children. We find that mothers (main respondents) who have been exposed to the anchored treatments report more pessimistic parental expectations. When splitting our sample into low and high educated mothers, we find that low educated mothers who have been allocated to anchored treatments are more likely to report lower levels of education than those in the non-anchored treatment. Anchored treatments also increase non-response in both high and low educated mothers, however, the effect is larger on the former. When assessing the accuracy of expectations to predict educational outcomes, we observe that anchored expectations have higher predictive power. Our findings inform to what extent the collection of subjective expectations data is subject to anchoring and which type of elicitation ( anchored or non-anchored ) should be considered according to the main purpose of the elicitation (i.e., item response vs prediction).

Two-party Bargaining Processes Based on Subjective Expectations: A Model and a Simulation Study

This work presents a model for a two-party bargaining process in which multiple offers are exchanged as the negotiation goes on, under a risk of breakdown. Typical game theoretical analyses of such settings assume the breakdown risk is known and the parties are able to calculate an initial offer that is immediately accepted by the other party, ending the negotiation. Aiming to develop a model that is closer to real-life situations, in which parties do exchange many offers in a bargaining process, we consider the parties are unable to compute the far-reaching consequences of their offers, and are guided by their subjective expectations of the outcome of the negotiation. This introduces a new perspective to the analysis of two-party bargaining processes: the confidence of the bargainers in terms of what they hope to achieve by bargaining with each other. The resulting model can be seen as an extension of the Zeuthen-Hicks bargaining model. We show analytically that under the assumption of concave utilities of both parties, the bargaining process converges to the nonsymmetric Nash bargaining solution, where the asymmetry is caused by differences in expectations. This result provides a new interpretation of the parameters of the nonsymmetric Nash bargaining solution, linking them to behavior in the bargaining process. As an additional contribution, we perform a simulation study to examine the role of confidence and to analyze the outcomes for non-concave utility functions.

The reliability of students’ earnings expectations

The elicitation of subjective expectations in surveys has gained significant interest in economics. Students’ earnings expectations have been widely used to model school and occupational choices, but quantification of the reliability of this variable has not yet been done. To what extent are earnings expectations affected by random measurement error? To assess this issue, in this paper we use different waves of a survey carried out in a Spanish university eliciting the earnings expectations of economics students. A test-retest method is applied with different time spans between the first wave and subsequent repetitions of the survey: two weeks and two and a half months later. A significant number of students declared large differences in earnings expectations, even in the case where the time span between surveys was short. Apart from the reliability, we also provide an estimate of the measurement error variance. With this information we show how a sensitivity analysis can be performed in external earnings expectations data research.

Research on Consumer Purchasing Channel Choice Based on Product Tolerance: The Mediating Role of Rationalization.

Consumers have subjective psychological expectations of the quality and brand of products before purchasing. There is a certain tolerance for products that do not meet expectations. The discomfort caused by tolerance can be smoothly carried out through “reasonable” self-comfort and explanation mechanisms. Based on the theory of rationalization defense mechanism, a 2 × 2 purchase channel matrix of online and offline purchase, online consultation, and the offline experience was constructed to explore the influence of consumers’ tolerance of product quality and brand on their purchase channel choice. The results show that: (1) consumer product tolerance positively influences consumers’ online purchasing choice; (2) consumer product tolerance influences purchase channel choice through rationalization; and (3) the sweet lemon mechanism mediates consumer product tolerance on online consultation and online purchase and offline experience, but the sour grapes mechanism does not mediate.

Performance study on the seepage and heat transfer in a bench-scale multi-well infiltration intake system for seawater source heat pump

The Beach Well Infiltration Intake (BWII) system is one of the various methods for pumping seawater for Seawater Source Heat Pump (SWHP) systems that improve the stability, reliability, and energy efficiency of the SWHP systems in cold climate areas. Because of the limitations of the site conditions, it is difficult to perform experimental studies on the BWII system under different experimental conditions, especially for multi-well systems. Therefore, a BWII experimental system that incorporated nine beach wells was established in a laboratory in this paper. The goal was to study the seepage and heat transfer performance of the multi-well infiltration intake system and calculate the influencing range for pumping groundwater on sands in a sandbox. Then, an established seepage and heat transfer model of the BWII system was validated by the experiment. Based on the validated model, the method for designing an experimental sandbox was studied. The research results showed that the effective width increased with an increase in the distance between the pumping well and the long water tank. However, the effective width in the back part of the pumping well decreased with an increase in this distance. The result that the effective length decreased with an increase in this distance was contrary to our subjective expectations. When the distance between the pumping well and the long water tank was 0.5 m, the effective length and effective width were 1.5 ∼ 2.1 m and 0.9 m respectively. The formulas of the effective width and the effective length were derived. The experimental study provided a method to study the seepage and heat transfer performance of the BWII system and was complementary to the theoretical research and the practical engineering field research. The research results provided in this study will contribute to the establishment of a set of seepage heat transfer similarity test methods.

Pain Limits Older Adults’ Expectations of Their Life Expectancy

Chronic pain is a leading cause of disability and is a limiting factor in individuals' assessments of their own subjective health; however, the association between pain and assessments of one's longevity has not yet been explored. Subjective life expectancy (SLE) predicts health and financial planning through its association with actual mortality and psychological wellbeing. This study assesses whether pain is associated with lower SLE among participants aged 50+ in the Health and Retirement Study (N=17,399). We conducted four sequential OLS regressions with the final model controlling for 12 sociodemographic, health, and psychological distress variables in addition to a composite variable measuring pain presence, intensity, and interference. The final OLS model indicates that pain predicts lower subjective probabilities of living an additional 10-25 years. Compared to individuals with no pain, those with interfering moderate to severe pain reported lower SLEs (b = -6.75, p < .001). Participants with interfering pain reported the lowest SLE, regardless of pain intensity. We discuss avenues for improving participants' SLEs and make recommendations for future research.

Pupil dilation predicts modulation of direct gaze on action value calculations

Perceiving direct gaze facilitates social cognition and behaviour. We hypothesized that direct gaze modulates decision-making, particularly calculations of action values. To test our hypothesis, we used the reinforcement learning paradigm in situations with or without direct gaze. Forty adults were recruited and participated in pupil size measurements and a two-armed bandit task. The task was conducted with 70% and 30% reward probabilities for each option. During the task, a female showing the Direct Gaze (DG) or Closed Eyes (CE) condition was presented from the start of each trial. The results showed that behavioural bias to choices with 70% reward probability increased more in the DG condition than in the CE condition and the expected reward value. This bias to choices with 70% reward in the DG condition was predicted by pupil dilation to DG. These results suggest that participants over-evaluated the expected reward value in the DG condition, and this DG effect may be related to subjective expectations of rewarding events indexed by pupil dilations. It is considered that perceiving direct gaze is a driver of reward expectations that modulate action value calculations and then cognitive processing and behaviours are facilitated.

Interaction between self-perceived disease control and self-management behaviours among Chinese middle-aged and older hypertensive patients: the role of subjective life expectancy

BackgroundOne of the effective ways to control hypertension is long-term self-management, which is difficult to maintain. Therefore, understanding how people engage in the process of self-management behaviour change is necessary. In this study, we aimed to examine the dynamic relationship between self-perceived disease control and self-management behaviours in Chinese middle-aged and older hypertensive patients, namely, medication use, self-monitoring, physical activity, tobacco and alcohol avoidance, and to explore the mediating role of subjective life expectancy (SLE) on this relationship.MethodsData were obtained from a nationally representative sample of 508 middle-aged and older hypertensive patients (aged 45+) from the 2013, 2015, and 2018 waves of the Chinese Longitudinal Healthy Longevity Survey. A cross-lagged panel model combined with mediation analysis was used to determine the dynamic relationship between self-perceived disease control and self-management behaviours and to clarify the mediating effect of SLE on this ascertained relationship.ResultsGood self-perceived disease control subsequently predicted good medication use, self-monitoring and physical activity, and vice versa. Subjective life expectancy (SLE) partially mediated the prospective reciprocal relationships between self-perceived disease control and these self-management behaviours, which accounted for 37.11, 25.88, and 19.39% of the total effect of self-perceived disease control on medication use, self-monitoring and physical activity, respectively. These self-management behaviours had a significant and positive feedback effect on self-perceived disease control. However, neither the direct and indirect effects (via SLE) of self-perceived disease control on tobacco and alcohol avoidance were revealed.ConclusionsPositive feedback loops of present self-perceived disease control, future SLE and self-management behaviours (medication use, self-monitoring, and physical activity) help middle-aged and older hypertensive patients adhere to these behaviours but are useless for the avoidance of addictive behaviours. Interventions aimed at enhancing the effect perception of general self-management behaviours (e.g., medication use, self-monitoring and physical activity) on the present disease control perspective, and future lifespan perspective would be beneficial for the consistent self-management behaviours of middle-aged and older hypertensive patients. The utility of present disease control perception to these self-management behaviours was much higher than the utility of future expectations. Alternative stress relief strategies may be conducive to long-term changes in addictive behaviours.

Expect Nothing: The (Lack of) Influence of Subjective Life Expectancy on Valuation of Child Health States.

Earlier research has shown that individuals' subjective life expectancy (SLE) affects health state valuation with time trade-off (TTO). Individuals with longer expected life durations are less willing to trade-off life duration, which yields higher utilities. In this article, the influence of SLE is explored in the valuation of EQ-5D-Y-3L with a proxy perspective, i.e., adults' valuation of health states considering the life of a 10-year-old child. As SLE for children is likely higher, this might explain earlier findings suggesting that individuals are less willing to trade-off years of life for children than for adults. A total of 197 respondents were recruited to take part in digital TTO interviews, facilitated by trained interviewers. TTO interviews were implemented in accordance with the recommended protocol for the valuation of EQ-5D-Y-3L. Respondents valued 10 EQ-5D-Y-3L health states for a 10-year-old child, after which they were asked to report how old they themselves expected to become and also how old they expected a 10-year-old child to become. Generally, adult respondents reported higher SLE for children than for themselves. Neither SLE was systematically associated with the willingness to trade lifetime or the number of life years traded off in TTO tasks. This null-result was substantiated by regression analyses per health state. The results of this study suggest that individuals' expectations about longevity are not associated with EQ-5D-Y-3L valuation. This lack of association is in contrast to earlier work and might be explained by the psychological distance introduced with proxy perspective valuation, or by the methodological differences with earlier work.

Social Context and Rejection Expectations Modulate Neural and Behavioral Responses to Social Feedback.

When meeting other people, some are optimistic and expect to be accepted by others, whereas others are pessimistic and expect mostly rejections. How social feedback is evaluated in situations that meet or do not meet these biases and how people differ in their response to rejection and acceptance depending on the social situation are unknown. In this study, participants experienced rejection and acceptance by peers in two different social contexts, one with high (negative context) and the other with low probability of rejection (positive context). We examined how the neural and behavioral responses to rejection are altered by this context and whether it depends on the individual's sensitivity to rejection. Behavioral results show that, on average, people maintain an optimistic bias even when mostly experiencing rejection. Importantly, personality differences in rejection sensitivity affected both prior expectations to be rejected in the paradigm and the extent to which expectations changed during the paradigm. The context also strongly modulated ERPs and theta responses to rejection and acceptance feedback. Specifically, valence effects on neural responses were enhanced in the negative context, suggesting a greater relevance to monitor social feedback in such a situation. Moreover, midfrontal theta predicted how expectations were changed in response to prediction errors, stressing a role for theta in learning from social feedback. Surprisingly, interindividual differences in rejection sensitivity did not affect neural responses to feedback. Our results stress the importance of considering the interaction between subjective expectations and the social context for behavioral and neural responses to social rejection.

The Unintended Consequences of Urban Community Infrastructure Investment for Consumption in China

Background: At a critical stage of the shift of economic growth, this work studied urban community infrastructure’s driving role in consumption, discusses the causes and action mechanisms of infrastructure in promoting residents’ consumption. Methods: Based on micro-household survey data, applying probit regression. Result: We found that community infrastructure, divided according to either its engineering or its service nature, has a great positive externality, significantly increasing the proportion of residents’ consumption, and that the driving force behind consumption in urban central areas, transportation, and environmental protection infrastructure is more obvious. Good urban community infrastructure facilitates residents’ production and promotes the efficient circulation of information, resources, and factors; improves residents’ subjective expectations; and brings more consumption opportunities so that community infrastructure significantly improves residents’ probability of consumption. Conclusion: In the context of economic transformation to a high-quality economy, we should pay attention to the key role of community infrastructure investment in structural transformation and choose urban central areas, capital-intensive industries, and transportation and environmental protection infrastructure as the investment focus so as to improve the consumption returns brought by infrastructure and achieve the transformation of the economy from an investment-driven one to an innovation-driven one.

Measurement of Subjective Expectations for Economic Overview of Recycling

The Research studies measurement of subjective expectations for economic overview of recycling. The recycling establishments were thought to significantly differ from similar non-recycling establishments in the way they operate, their process inputs, and their purchases from other establishments in the economy. The problem, we propose a quintile-based flexible approach that uses the estimated median as a measure of central tendency and the estimated inter quartile range (IQR) as a measure of respondent uncertainty. We compare estimators of the determinants of expectations and uncertainty using both a specific parametric approach and our quintile-based flexible approach. Next, existing in-house data from previous studies was examined to identify where recycling and reuse Industry-specific data was lacking for those categories lacking adequate input data, a detailed survey that asked for much greater detail regarding the cost elements of production was sent to select establishments. The higher is the uncertainty, the more extreme is the response to future losses compared to the response to future gains. The respondents in Sting case like as experts; economists and executives in managerial positions. VAS should therefore be further tested in general population to be accepted as the measurement method of economic expectations for recycling.