RDP 1999-03: Householders' Inflation Expectations Appendix B: Data Definitions

1. Survey Data

Inflation expectations, expectations about various other economic variables and respondent characteristics are all obtained from the Melbourne Institute of Applied Economic and Social Research Surveys of Consumers. Specific questions are listed in Appendix A.

Median inflation expectations are constructed from the frequency distribution of individual responses using the following formula.

lb = lower bound of range

n = number of observations

/ = frequency of median class

F = cumulative frequency of observations below median class

W = width of median class

Responses are weighted to reflect the gender, age and location distribution of the population and qualitative responses are distributed according to quantitative responses. These adjustments are explained in more detail in Section 2.1.1 in the text.

2. Underlying Inflation

Rate of change in the Treasury underlying CPI. Australian Bureau of Statistics, Consumer Price Index, ABS Cat. No. 6401.0.

3. Import Prices

Tariff adjusted import prices. Import Price Index, ABS Cat. No. 6414.0.

4. Unit Labour Costs

Nominal unit labour costs, Reserve Bank of Australia.

5. AWOTE

Private sector AWOTE, (sa), ABS Cat. No. 6302.0, Table 2.

6. Output Gap

Hodrick Prescott output gap estimated with real GDP(A) from 1980 to 1997, with λ = 1,600. See de Brouwer (1998).

7. Unemployment Rate

Total unemployed persons as a proportion of the labour force. ABS Cat. No. 6202.03, Table 2.

8. Cash Rate

From 1990 onwards, the target cash rate. Prior to 1990, the unofficial 11am call cash rate. Reserve Bank of Australia Bulletin, Table F.1.

9. Exchange Rates

The $US/$A and TWI exchange rate measures, May 1970 = 100. Reserve Bank of Australia Bulletin, Table F.9.