EARNINGS EXPECTATIONS, REVISIONS, AND REALIZATIONS

During the spring and the fall of 1993, respondents to a national hous ehold survey were asked to report expectations of spring 1994 weekly e arnings. Elicited in the form of subjective probabilities, these data are potentially much more informative than are typical reports of econ omic expectations. Subjective probability distributions of future week ly earnings are estimated for each respondent, based on his or her rep orts of a series of subjective probabilities. This paper analyzes the cross-sectional variation in expectations, revisions of expectations b etween the spring and the fall of 1993, and the relationship between 1 993 expectations and the distribution of spring 1994 earnings realizat ions. Generally positive findings on the validity of the data bode wel l for the prospects of eliciting expectations in future surveys.