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Does Consumer Confidence Forecast Household Saving and Borrowing Behavior? Evidence for Poland

Aneta Maria Kłopocka ()
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Aneta Maria Kłopocka: University of Finance and Management in Warsaw

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2017, vol. 133, issue 2, 693-717

Abstract: Abstract Consumer confidence plays an important role in households’ decision-making processes. This study investigates the effects of consumer confidence on household saving and borrowing behavior that are unsatisfactorily considered in previous discussions. The questions of interest are first, whether indexes of consumer confidence have any predictive power on their own for future household saving and borrowing rates, and second, whether they contain information about future household saving and borrowing rates aside from the information contained in other available indicators. In addition to aggregate confidence indicators, their components are used to provide more precise information. Overall, the multiple linear regression analysis (OLS technique) of Polish time-series data gives positive answers to both questions. This finding supports the recommendation of combining the strengths of objective indicators (such as economic fundamentals) and subjective indicators (such as consumer confidence) to improve household financial behavior forecasts.

Keywords: Consumer sentiment; Household saving rate; Household debt; Financial expectations; Subjective and objective indicators (search for similar items in EconPapers)
JEL-codes: E27 E21 (search for similar items in EconPapers)
Date: 2017
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