Personal Experiences and Expectations about Aggregate Outcomes

Theresa Kuchler, Basit Zafar

Research output: Contribution to journalArticlepeer-review

96 Scopus citations


Using novel survey data, we document that individuals extrapolate from recent personal experiences when forming expectations about aggregate economic outcomes. Recent locally experienced house price movements affect expectations about future U.S. house price changes and higher experienced house price volatility causes respondents to report a wider distribution over expected U.S. house price movements. When we exploit within-individual variation in employment status, we find that individuals who personally experience unemployment become more pessimistic about future nationwide unemployment. The extent of extrapolation is unrelated to how informative personal experiences are, is inconsistent with risk adjustment, and is more pronounced for less sophisticated individuals.

Original languageEnglish (US)
Pages (from-to)2491-2542
Number of pages52
JournalJournal of Finance
Issue number5
StatePublished - Oct 1 2019

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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