Consumer Expectations: A Residual Based Approach

Fahd Rehman and Russel Cooper

Review of Income and Wealth, 2017, vol. 63, issue 4, 841-866

Abstract: This paper presents an economy‐wide consumer expectations indicator that reflects different degrees of optimism or pessimism with respect to consumers’ confidence in their economy. The indicator provides a useful complement to traditional economic indicators that are frequently used to compare countries, such as gross domestic product (GDP) in purchasing power parity (PPP) terms. Our indicator may be seen as representing the influence of social wealth on economic behavior–that is, of effects left out of a standard economic analysis. We use a theoretical approach to integrate the expectations measure with the International Comparison Program's (ICP) PPP GDP statistics which produces a measure we term “effective GDP.” Compared to the ICP's PPP figures, the measure of “effective GDP” differs from the ICP's PPP estimates by as much as four to five percent in the positive direction for apparently optimistic countries and as much as two percent downwards for pessimists.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/roiw.12227

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:revinw:v:63:y:2017:i:4:p:841-866

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0034-6586

Access Statistics for this article

Review of Income and Wealth is currently edited by Conchita D'Ambrosio and Robert J. Hill

More articles in Review of Income and Wealth from International Association for Research in Income and Wealth Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().