Latent class analyisis for reliable measure of inflation expectation in the indian public

Abstract

The main aim of this paper is to inspect the properties of survey based on households inflation expectations, conducted by Reserve Bank of India. It is theorized that the respondents answers are exaggerated by extreme response bias. Latent class analysis has been hailed as a promising technique for studying measurement errors in surveys, because the model produces estimates of the error rates associated with a given question of the questionnaire. I have identified a model with optimum performance and hence categorize the objective as well as reliable classifiers or otherwise.

16 pages, 04 Tables and 03 figures