The quest for the best consumer confidence indicator

Andreas Jonsson and Staffan Lindén
Authors registered in the RePEc Author Service: Staffan Lindén

No 372, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: We search through all possible consumer confidence indicators in order to find the single indicator that has the highest correlation with private consumption growth. Moreover, we contrast this indicator to the Consumer Confidence Indicator used by the European Commission, and some alternative indicators; also in terms of their predictive power of private consumption. In this context, we test the hypothesis that an indicator based on questions related to the household, rather than the general economy, would prove informative. We find that this "micro" indicator, as well as an optimal indicator that takes into account the specifics of all EU member states, outperform the current Consumer Confidence Indicator. Both these indicators also perform better than an indicator based on the popular factor methodology.

Keywords: The quest for the best consumer confidence indicator; consumer confidence; private consumption; predictive power; Jonsson; Lindén (search for similar items in EconPapers)
JEL-codes: E21 E27 E29 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2009-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: The quest for the best consumer confidence indicator (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0372

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