By Alastair Cunningham of the Bank’s Conjunctural Assessment and Projections Division.
Alastair Cunningham sets out a simple framework to analyse how firms respond to surveys and outlines the most widely used technique for converting qualitative responses into a quantitative measure. He shows that the results of this technique are often biased, and describes a more rigorous approach. Possible explanations are put forward for why survey data tend to be less volatile than official data. Finally, the use of forward-looking survey data is discussed.
Quantifying survey data