APAC central banks risk misreading inflation due to survey gaps, ADB says

Divergence affects expectation readings.

Household surveys measuring inflation expectations could under-represent certain groups, leading to biased estimates as seen in an Asian Development Bank (ADB) study that used New Zeland data. 

Between 1998 and 2022, about 44% of respondents skipped the key question on expected inflation, with lower response rates among younger individuals, women, low-income households, and ethnic minorities including Māori, Pacific Islanders, and Asians.

Researchers applied a statistical selection model to account for missing responses, finding that overall inflation expectations were about 0.3 percentage point lower than unadjusted survey results suggested. The adjustment also reduced apparent differences by gender, income, and ethnicity, leaving age as the primary factor influencing variation in expectations.

Survey methodology affected participation rates. The Reserve Bank of New Zealand’s shift from telephone to online surveys in 2018 reduced nonresponse to roughly 24% and balanced representation across demographics, illustrating how survey design influences measured public expectations.