Consumers Sentiment and Cognitive Macroeconometrics Paradoxes and Explanations

Maurizio Bovi
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Maurizio Bovi: ISAE - Institute for Studies and Economic Analyses

No 66, ISAE Working Papers from ISTAT - Italian National Institute of Statistics - (Rome, ITALY)

Abstract: Using data from the Business Surveys Unit of the European Commission as a long-running-continental-scale experiment, this paper examines how, and how accurately, people assess economic systems. Data show both commonsense (e.g. people know the past better than the future) and puzzling results (e.g. there is a systematic bias in forecasts). The former support the reliability of the surveys, the latter are in sharp contrast with the standard maintained hypothesis of a world populated by calculating and unemotional maximizers. The dualism of behavior may be fruitfully explored via cognitive psychology, according to which both logic and emotions systematically drive people’s choices.

Keywords: Beliefs; survey research; consumer sentiment; cognitive economics. (search for similar items in EconPapers)
JEL-codes: C42 C82 D12 D84 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2006-04
New Economics Papers: this item is included in nep-cbe and nep-neu
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