Elicitation of Subjective Expectations by Dr. Basit Zafar

August 2, 2019
On Tuesday 30 July 2019 Dr. Basit Zafar, Research Fellow at CERP and an Assistant Professor at W. P. Carey School of Business, Arizona State University conducted an exclusive talk on “Elicitation of Subjective Expectations: Why and How?”. The event took place at CERP’s head office in Lahore and was attended by CERP’s management and research team. The talk revolved around how to elicit subjective expectations and its use to predict choice behaviour. Since most decisions such as those related to work, retirement or schooling are made under uncertainty, with standard data, one cannot understand individuals’ decision-making process without making strong assumptions about their beliefs and expectations. Dr. Zafar talked about the importance of predicting choice behaviour for economists and social scientists and the role eliciting subjective expectations can play in designing an effective policy. According to Dr. Zafar, individuals make decisions under uncertainty, and to understand these decisions one must be able to extract how expectations and revealed preferences shape choices. Dr. Zafar also discussed the absence of data on subjective expectations and how to elicit them through survey responses. He then discussed the different elicitation methods available to collect such data namely using percent chance questions in surveys, frequentist inference approach, and visual formats. After sharing a few examples from his research the talk concluded with a Q&A session.