Psychology, consumer sentiment and household expenditures: a disaggregated analysis

Marco Malgarini (marco.malgarini@anvur.it) and Patrizia Margani

MPRA Paper from University Library of Munich, Germany

Abstract: The aim of the paper is to assess the role of the Italian Consumer Sentiment Index (CSI) as an autonomous driving force of consumption decisions. We test for the presence of “rule of thumb” consumers as originally proposed by Cambell and Mankiw (1991), using sentiment measures distinguished by working condition of the household. Consumption data are disaggregated according to durability. The role of sentiment results to be stronger for service expenditures. Psychological motives of employees are found to have a particularly significant influence on consumption decisions. Moreover, CSI can not be explained by economic fundamentals alone, capturing also the effects of the political cycle and exceptional circumstances.

Keywords: Consumer sentiment; Permanent Income hypothesis; excess sensitivity; psychological approach; heterogeneity of individuals (search for similar items in EconPapers)
JEL-codes: E21 E32 (search for similar items in EconPapers)
Date: 2005-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Psychology, consumer sentiment and household expenditures: a disaggregated analysis (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:42443

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