The Usefulness of Consumer Confidence in Forecasting Household Spending in Canada: A National and Regional Analysis

Andy C.C. Kwan and John Cotsomitis

Economic Inquiry, 2006, vol. 44, issue 1, 185-197

Abstract: We examine the ability of the Conference Board of Canada's Index of Consumer Attitudes (ICA) to forecast Canadian household spending both nationally and regionally. Our results indicate that at the national level, the ICA is able to predict total personal consumption expenditures and various subcategories of consumer spending, even when controlling for other macroeconomic variables. We find, however, that the forecasting ability of the regional indices is somewhat weaker when compared to that of the national ICA. Overall, our results reconfirm that consumer confidence is a reliable predictor of household spending in Canada. (JEL C53, E21) Copyright 2006, Oxford University Press.

JEL-codes: C53 E21 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (39)

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