A Critical Evaluation of the Consumer Confidence Survey from India

Pooja Kapoor and Sujata Kar

Economic Studies journal, 2022, issue 7, 172-198

Abstract: This study examines the relevance of the quarterly Consumer Confidence Survey conducted by the Reserve Bank of India by analyzing consumers’ spending behaviour vis-a-vis their expectations and perceptions of inflation in the Indian context. The ordered probit regression results demonstrate the positive influence of expected and perceived inflation and the negative influence of expected change in current real income and perceived change in current real income on the expected change in real spending. These results are not commensurate with underlying economic theories, which render the relevance and purpose of these surveys questionable. A few other results and observations from the respondents’ demographic profile further strengthened our argument. In an emerging economy such as India, such surveys and their analyses are at a budding stage, and this is the first study to question the validity and relevance of these surveys. The present study also contributes to our understanding of how households expect and perceive inflation and incorporate them into their decision-making, which is pertinent for the efficacy of central banks as inflation targeting is the main objective of monetary policy.

JEL-codes: D12 D84 E20 E70 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:bas:econst:y:2022:i:7:p:172-198

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