Consumers Confidence and Households Consumption in Brazil: Evidence from the FGV Survey

Aloisio Campelo, Viviane Seda Bittencourt and Marco Malgarini ()
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Aloisio Campelo: Instituto Brasileiro de Economia
Viviane Seda Bittencourt: Instituto Brasileiro de Economia

Journal of Business Cycle Research, 2020, vol. 16, issue 1, No 2, 19-34

Abstract: Abstract The deterioration of Consumer Confidence has been considered an important driver of the recent financial crisis. However, empirical evidence on the relationship between confidence and household consumption is often inconclusive; in many cases, available analysis does not seem to confirm that confidence is able to predict expenditures once the role of economic fundamentals has been accounted for. Nevertheless, generally speaking, most of the literature refers to the most advanced economies of Europe and the USA, while evidence for emerging economies remains scarce. The main aim of this paper is to fill this gap for Brazil, looking at Consumer Survey data published by the Fundação Getulio Vargas since 2005, and studying its relationship with Brazilian consumption expenditures. According to the results, the overall Consumer Confidence Index and the Present Situation Index are good predictors of consumption, helping to improve the goodness of fit of consumer spending forecasting models. We also show that in Brazil a positive shock to confidence has a positive and significant impact on consumption for at least three quarters, a finding similar to those for more industrialized countries.

Keywords: Consumer confidence; Household consumption expenditures; Survey data; Brazil; VAR models (search for similar items in EconPapers)
JEL-codes: C32 D12 D8 E17 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s41549-020-00042-2

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