1 Department of Economics and Department of Agricultural, Food, and Resource Economics, Michigan State University, and NBER, 18C Marshall-Adams Hall, Michigan State University, East Lansing, MI 48824-1038. · 2 Department of Economics, University of Michigan, and NBER, 238 Lorch Hall, 611 Tappan St., Ann Arbor, MI 48109-1220. · 3 The Harris School, University of Chicago, and NBER, 1155 E. 60th Street, Chicago, IL 60637. · 4 Institute for Social Research, University of Michigan. P.O. Box 1248, Ann Arbor, MI 48106-1248.
Abstract
This paper analyzes the predictive power of a new data set of consumer gasoline price forecasts taken from the Michigan Survey of Consumers (MSC). MSC data generally perform as well as a no-change forecast in predicting future gasoline prices, and they substantially out-perform the no-change forecast during the recent economic crisis, during which time they track futures market prices. Finally, the cross-respondent dispersion of the MSC forecasts increases substantially during the economic crisis, paralleling the large increase in price volatility at this time.