Surveying business uncertainty

By David E. Altig, Jose Maria Barrero, Nicholas Bloom, Steven J. Davis, B. Meyer, Nicholas B. Parker. Journal of Econometrics, 2019

148 citations recorded by the source corpus.

We elicit subjective probability distributions from business executives about their own-firm outcomes at a one-year look-ahead horizon. In terms of question design, our key innovation is to let survey respondents freely select support points and probabilities in five-point distributions over future sales growth, employment, and investment. In terms of data collection, we develop and field a new monthly panel Survey of Business Uncertainty (SBU). The SBU began in 2014 and now covers about 1,750 firms drawn from all 50 states, every major nonfarm industry, and a range of firm sizes. We find three key results. First, firm-level growth expectations are highly predictive of realized growth rates. Second, subjective uncertainty is highly predictive of forecast errors and the magnitude of future forecast revisions. Third, subjective uncertainty rises with the firm’s absolute growth rate in the previous year and the extent of recent news about its growth prospects. We aggregate over firm-level forecast distributions to construct monthly indices of business expectations (first moment) and uncertainty (second moment) for the U.S. private sector.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/373ecc7529fe6f252ac8d868ddb2d2fb9e3493a6

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Citations in the corpus

COVID-19 Is Also a Reallocation Shock (2020, background): “These thresholds follow Altig et al. (2020b).”
The Impact of Brexit on UK Firms (2019, unknown): “13 To generate subjective uncertainty for each variable we used the 5-point estimated values and probabilities, using the same process as Altig et al. (2019). 14 For example, the correlation between the VIX (1 month implied volatility on the S&P500 index) and the monthly standard-deviation of daily ”
The Impact of Covid-19 on Productivity (2020, unknown): “Third, on using business surveys to evaluate the impact of major shocks we build on a recent growth literature, for example Altig et al. (2020b) and Bhandari et al. (2020). More generally the survey literature has focused on a range of topics around expectations and prices, for example, Coibion and ”
The Effect of Macroeconomic Uncertainty on Household Spending (2021, background): “This question follows the structure developed by Altig et al. (2020) to measure the uncertainty of”
Why Working from Home Will Stick (2020, methodology): “13 Altig et al. (2020a, 2021) ask business executives about WFH plans in the Survey of Business Uncertainty (SBU), a broad sample of American companies fielded by the Federal Reserve Bank of Atlanta.14 The SBU question design is very similar to the SWAA question, facilitating a comparison.”
The Impact of COVID-19 on US Firms (2021, background): “Prior COVID-19 firms surveys obtained response rates that were substantially lower, for example 0.017% for Bartik et al. (2020) and 1.5% in Alekseev et al. (2020, while pre-pandemic US firm surveys typically obtained response rates between 10% to 30% (e.g. see Altig et al. 2020).”
Unmasking the Impact of COVID-19 on Businesses : Firm Level Evidence from across the World (2020, methodology): “To quantify the uncertainty generated by the COVID-19 shock, we rely on a measure that builds on Altig et al. (2020b).”