| Abstract: | This paper examines the connection between information and expectations. Drawing upon Lazarsfeld et al.'s (Lazarsfeld, P.F., Berelson, B., Gaudet, H., 1944. The People's Choice. Duell, Sloan, and Pearce, New York) classic work on communication flows, we devise an asymmetric transmission model of expectation formation. This model assumes that the expectations of the less informed segments within the electorate are influenced by the expectations of more informed groups but that the opposite does not hold. We use educational differences as a proxy for information heterogeneity. A vector autoregression (VAR) analysis on monthly surveys of inflation expectations supports the asymmetric transmission hypothesis. |
